In yet another month favourable to cyclical stocks, AMPLEGEST PME underperformed its benchmark index, despite excellent earnings announced by its largest positions (BILENDI, OENEO and SIDETRADE).
As conditions deteriorate, investments in cyclical categories should gradually decline. This will benefit the fund’s stocks, which are well positioned to resist an economic slowdown.
We have opened a position in LISI, as we believe that the company will profit from a very favourable scissor effect. At the same time that its principal prospects (automotive and aeronautics) may be entering a period of long-term recovery, management has significantly lowered costs by automating production. In addition, the transition towards electric cars has boosted LISI’s earnings.
We have also added to our position in TRIGANO. The market seems to be pricing in a crisis, even though the company has a record-level order book and pricing power which compensates for rising costs. As a result, margins improved significantly in the first half. Finally, we have added to our position in OENEO. Beyond the company’s excellent fundamentals, momentum is significantly improving in the wine barrel industry (25% of revenues) after two years of sub-par investments by winemakers.