Philip Rodrigs Shares Highlights of Raynar’s Largest Portfolio Holdings
Raynar Portfolio Management’s top ten holdings comprise big-name brands, including LoopUp, BigBlu Broadband, MaxCyte, and Avacta.
Having identified a multitude of unexpected, high-conviction ideas, Philip Rodrigs is stocking up on COVID-19 beneficiaries to kickstart Raynar Portfolio Management’s Flagship Strategy. Philip is surprised at the low valuations ascribed to many UK small-cap stocks that will likely benefit from increased demand at the hands of the pandemic.
‘By Flagship’s launch date of 1 June, COVID-19 was not a mystery; it was well-known,’ Philip says. ‘What was also well-known was that homeworking is a massive thing. Everyone was experiencing it, and logically I would have thought all of the stocks that play into that theme would already have been very strongly re-rated in valuations. So, I was very pleased that we got to the launch date and there were still very attractive prices on offer for those investments.’
Raynar Flagship Holdings: LoopUp and BigBlu Broadband
Since launching the strategy in June, Raynar Flagship has established its two current largest holdings: the video conferencing system LoopUp and satellite broadband provider BigBlu Broadband. These holdings make up 13.1% of Flagship’s portfolio.
Following a series of positive trading statements, LoopUp is already reaping rewards, rising from its purchase price of c111p to approximately 210p. Philip compares the firm to Zoom, noting its wide use in the UK and US professional services sectors.
‘LoopUp is well-used in the professional services industry and has been for some time because it enjoys a very high-quality, low-latency international network,’ Philip explains. ‘It is clear from trading that they are a direct beneficiary of increased usage due to that increase in home working. I have obviously been meeting with management teams virtually, and on many occasions, we have been Zooming, but we have also been LoopUping.’
Meanwhile, BigBlu Broadband is the top satellite broadband services seller in Europe. They also fill an industry-leading position in Australia. Philip notes that numerous satellites will be launched over upcoming years, and increased bandwidth will make BigBlu Broadband’s proposition even more attractive. Since Philip put 62% of the fund’s capital to work in June, the strategy has already grown by 3.6%.
‘This company is already well-positioned in my view – COVID-19 is just an added extra boost to the proposition,’ Philip says. ‘If you want to use LoopUp or Zoom, you need good connectivity. If your residence is not near good-quality broadband, then one of your few alternative options is to use satellite broadband. Clearly, people in remote locations are increasing their demand for high-quality broadband and looking at satellite as an option.’
‘Investing at the smaller end of the stock market, it is never wise to buy things too quickly because that can drive the price against you,’ Philip says. ‘You do need to make those investments cautiously, [but] we were able to quite rapidly invest the capital.’
Raynar Flagship Holdings: Maxcyte and Avacta
Raynar Portfolio Management has also integrated fruitful firms specialising in medical technology into its portfolio. Among these, MaxCyte – the portfolio’s third-largest holding – is aiding the development of innovative cancer cures.
‘It is the vogue for any healthcare-related company to try and find a reason to talk about their link to COVID-19; Maxcyte does not need to do that,’ Philip says. ‘It is a phenomenal global platform, creating a whole new class of drugs by allowing you to take blood from a patient, inject a drug or genetic instructions into the cells, and then return those cells to the patient. There is considerably lower rejection risk. That is a whole new way of trying to cure cancer.’
Similarly, the antibody specialist Avacta also ranks in the Portfolio’s top ten holdings. Though Raynar’s investment case isn’t built primarily around the pandemic, Avacta is currently devising a five-minute COVID-19 test designed for quick checks, such as for passengers queueing to board flights or sports and music fans waiting to enter stadiums or arenas.
‘I am not investing just because of their COVID-19 parts, but because of their very wide application platform that can apply to a whole host of different disease areas,’ Philip says.
Raynar’s Investments in Brand New Opportunities
The Flagship Strategy has so far benefited from focusing entirely on brand new opportunities. Raynar Portfolio Management continues to seek resilient firms that grow year-on-year at low valuations and are not cyclically exposed to the economy.
‘People have been so busy evaluating what has been a tidal wave of fundraisings by so many different companies, it does make it challenging for those fund managers to evaluate brand new opportunities,’ Philip says. ‘That has been in our favour because we can exclusively focus on the companies we think really work for the times we find ourselves in. It is a freshly built portfolio with completely fresh ideas.’
For more information on Raynar Portfolio Management’s Flagship strategy, visit https://raynarpm.com.
About Philip Rodrigs
Philip Rodrigs is an award-winning Chartered Financial Analyst who is known across financial markets for the innovative investment trust that he strategised and managed for River and Mercantile. He is also widely recognised for growing and soft-closing small-cap funds from £90 million to £650 million within eight years and £150 million to over £1 billion within four years. As the CEO and a Portfolio Manager of Raynar Portfolio Management, Philip specialises in small-cap stocks and has managed funds on behalf of companies for over 15 years.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes