Ask A Fund Manager
The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Bell Direct market analyst Grady Wulff picks two ASX shares that are ready to cash in on major global thematics.
The ASX share for a comfortable night's sleep
The Motley Fool: If the market closed tomorrow for four years, which stock would you want to hold?
Grady Wulff: I think for us it's BHP Group Ltd (ASX: BHP), because it's diversifying into the battery metal space as we've just recently seen through its acquisition of Oz Minerals Limited (ASX: OZL) for $9.6 billion.
This is really important to note, because to date, they're obviously one of the biggest miners in the world, but they hadn't diversified into the way forward, which is decarbonisation, greener future, greener energy — and now they've got that under their belt.
They're really indestructible, because that's the way forward. The decarbonisation movement's not going anywhere, anytime soon. And the way that they needed to go, they've now gone, and they're going to capitalise on the greener movement.
So I would keep them in the folio for four years, just because they're at the right place, right time and they're finally on board the electric train.
MF: Fantastic. People don't usually think of mining stocks to hold for that long, because commodity prices go up and down — but as you say, BHP's getting into the right areas?
GW: They are, absolutely.
Looking back
MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.
GW: For us, I think investors will agree with me here, that not buying into Whitehaven Coal Ltd (ASX: WHC) or Boss Energy Ltd (ASX: BOE) in 2022 was the biggest regret.
Both stocks looked really strong last year and no one could have predicted the global energy crisis, but we kind of saw it coming. So not getting into that is a massive regret. Both are up 200% and 600% year to date respectively.
Boss Energy is a uranium producer. The price of uranium is set to double by the end of next year from $50 a pound to $100 a pound. And that's when Boss Energy comes online — the end of next year, with production expected then. So they're looking really well positioned to be capitalised from the tailwinds in the price of the commodity.
And then also Whitehaven Coal — we've seen thermal coal go through the roof up 500% year to date, which is just… And it's not turning around anytime soon. The European winter's coming, Russia has cut its coal supply to Europe. So what are they going to do? They're going to use other suppliers.
So Whitehaven Coal and Boss Energy are definitely the ones that we regret. But in saying that, investors need to stick to their long-term plans and not invest with hindsight.
MF: Is it too late to buy into either of those?
GW: Is it too late? No, it's not too late. That's literally what I got asked the other day.
Boss Energy, they're coming online next year, so they still have, the fact that they're already soaring is a big thing, but it's not too late, no.
Whitehaven Coal, we have a hold on at the moment, only because in September their production was down 30% because of the open-cut mines because of La Nina weather events and flooding. So we have a hold on them at the moment, but Boss Energy is a speculative buy, so that's the one we're definitely keeping an eye on.
