Valentine's Day Gallery: The Stocks Managers Love For The Long Term

InterActivCorp

Chosen by: Jeremy Gleeson, portfolio Manager of the AXA WF Framlington Digital Economy fund

Online dating is now widely and increasingly accessible thanks to the adoption of smartphones, and those in the market for romance can now easily search for potential partners using a variety of options.

Tinder sees two billion swipes a day, resulting in one million dates a week, which we find likely to pick up around key days such as Valentine's Day. In fact, a third of all relationships now begin on a dating app.

But online dating is also big business. Tinder is now the second highest-ranking app by worldwide consumer spend in the iOS App Store and Google Play, after Netflix.

Within the AXA WF Framlington Digital Economy fund, we invest in InterActivCorp (IAC), which owns a substantial stake in Match Group, and owns and operates more than 45 subscription-based online dating services, including three of the four highest-earning dating apps (Tinder, Match.com and PlentyOfFish).

We find by owning multiple brands catering to different needs, IAC through Match Group, is able to provide a breadth and purity of exposure to the modern dating economy. Indeed in Q3 2018, Match Group's total revenue grew 29% over the previous year's Q3 to $444m, driven by a 23% rise in paid subscribers.

SITC 

Chosen by: Carolyn Chan, fund manager in the Liontrust Asia team

The Liontrust Asia Income fund found a real diamond in April 2014 – shipping company SITC. Since then, the stock has more than doubled, outperforming both the MSCI Asia Pacific ex-Japan index and the MSCI Asia ex Japan index.

SITC is an Asia-focused integrated logistics company, which provides high frequency shipping and Chinese land logistics services. It operates small-sized fleet container vessels and is unique in its positioning, operating exclusively within Asia.

We continue to believe that the company will be a key beneficiary of increasing regional trade as well as the gradual shift in manufacturing from China to lower-cost locations in Asia.

Hotel Chocolat

Chosen by: Dan Harlow, portfolio manager of the AXA Framlington UK Smaller Companies fund

With more than 110 stores, chocolatier and cocoa grower Hotel Chocolat is very assuredly investing in its future growth. The company’s focus on "more cocoa, less sugar" helps gives its products a strong point of differentiation and authenticity against peers.

The long-term overseas potential for this young company is exciting. We are optimistic that new and continued product innovation, their recently launched loyalty scheme, new wholesale relationships, and a continued rollout of stores can enhance and extend the awareness of the brand. 

The company has recently re-entered the US and it has bold plans for Japan. While investments associated with some of these programmes will limit margin progression near term, Hotel Chocolat is helping to establish the platform for a much bigger business in the longer term.

The Meet Group 

Chosen by: Anthony Ginsberg, manager of the HAN-GINS Innovative Technologies UCITS ETF

The Meet Group’'s portfolio of mobile social entertainment apps helps millennials and Generation X-ers connect. Unsurprisingly, Valentine's Day is expected to be among its busiest time in terms of traffic. 

Its primary apps, MeetMe, LOVOO, Skout and Tagged keep millions of mobile active users entertained – resulting in very active casual chats, friendships, dates and marriages. 

As mobile usage soars worldwide and grabs an ever increasing slice of advertising spend, MEET's share price recently hit a high of $6, almost doubling in 12 months.

It has a diversified revenue mix consisting of in-app purchases, subscriptions and advertising. At 1.9%, it is one of the largest holdings on the HAN-GINS Innovative Technologies ETF.

Prada

Chosen by: Hugh Sergeant, manager of the River and Mercantile Global Recovery fund 

Prada is a popular choice for some shoppers at Valentine’'s Day, with a range of luxury goods – including speciality handbags – on offer.

The sector has recovered over the last few years, but far from the trend being completed, it remains a long term growth industry.

Having initially benefitted from cheap valuations due to a cyclical downturn, there still remain some opportunities in the sector, notably in Prada.

The business has taken longer to turn around than some other similar companies but is now seeing the initial evidence of a return to growth.

In terms of its valuation, the share price has come back very sharply over the past few months, coinciding with the Chinese equity market correction, meaning it now trades at an all-time low relative to the global benchmark.