S&P/ASX 200 Index (ASX: XJO) shares Newmont Corporation CDI (ASX: NEM) and James Hardie Industries plc (ASX: JHX) are worthy of long-term investment, according to Blackwattle Partners.
In recent newsletters, the Australian investment manager outlined why it is backing these ASX 200 stocks from the materials sector for the long term.
Let's take a look.
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Why fundie says we should go long on these ASX 200 shares
'Going long' simply means investing for the long term with the expectation of a rising share price.
Fundie expects 'material upside' on ASX 200 gold miner
Newmont shares are held within Blackwattle's Mid Cap Quality Fund. The fund aims to outperform the ASX 300 Accumulation Index ex ASX 20, after fees and before taxes, over the long term.
Portfolio managers Tim Riordan and Michael Teran said the second-largest gold share of the ASX 200 was the biggest positive contributor to the fund's performance in July.
The gold stock rose by 16.04% in July. Newmont shares lifted amid a rising gold commodity price and the release of the miner's quarterly report.
They commented:
NEM is the largest, lowest-cost and most diversified gold miner globally. NEM has a strong track record of delivering value from acquisitions, with the 2019 acquisition of Goldcorp in Canada creating significant shareholder value.
We expect NEM to deliver similar upside from the recent Newcrest acquisition, and NEM's 2Q24 result showed further progression, delivering a second strong earnings result in a row, upgrading the asset sales target and starting an US$1bn on-market buyback well ahead of the market's expectations.
US gold miner Newmont acquired Australian company Newcrest Mining in October 2023.
Riordan and Teran said they continued to "see material upside" for the ASX 200 gold share.
They describe Newmont as an "enduring high-quality business" and "the highest-quality gold miner globally."
They added:
We expect NEM to execute on numerous multiyear internal levers to maintain and improve the business quality including: extracting Newcrest synergies, organic production expansion, operating cost reductions, portfolio high grading through asset sales, material debt reduction & further capital returns.
US rate cut likely to boost this building materials supplier
James Hardie shares are held within Blackwattle's Large Cap Quality Fund. The Fund aims to outperform the ASX 200 total return index, after fees and before taxes, over the long term.
Portfolio managers Ray David and Joe Koh said the building materials supplier had gone from being a significant detractor from the fund's performance to a large contributor in July.
The ASX 200 share rose by 15.58% last month.
They commented:
Prior concerns over weaker end-market demand from US R&R (repair and remodel), higher input costs and higher operating expenses saw the stock sold down by investors in May.
But the prospects of a looming rate cut in the US, spurring housing activity, drew market attention back to the growth potential for JHX (as well as the broader homebuilder names).
We remain confident in the long-term prospects for JHX, supported by strong pricing power and ongoing market share gains against alternative siding materials such as vinyl.
