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Stick with global-champ Samsung, says US$46b fund manager
[HONG KONG] There's not been a lot for investors to like in Samsung Electronics Co. since its stock reached a record in November, with slowing global smartphone sales and weaker memory chip and OLED screen momentum turning a number of analysts bearish.
Yet Lewis Grant, a London-based portfolio manager with Hermes Investment Management is happy to stick with South Korea's largest company - in part because of the same chaebol structure that's made Samsung a magnet for domestic criticism of connected, influential giant conglomerates.
"We are going into a world now where a handful of companies will dominate our lives more than ever before, and I think Samsung has the potential to be one of those companies," Mr Grant said in an interview in Hong Kong. "What I like about companies like Samsung: it has a very diversified exposure. It's not just doing one thing but a number of things well." Hermes has about US$46 billion in assets under management, including positions in Samsung Electronics and Samsung Fire & Marine Insurance Co. It also has holdings in Amazon.com Inc., Facebook Inc., Google parent Alphabet Inc. and chip manufacturers Taiwan Semiconductor Manufacturing Co. and Western Digital Corp. - firms with an ever-increasing presence in the average consumer's daily life via smartphones, computers and online shopping habits.
Samsung may not be a poster child for corporate governance after the bribery conviction of Vice Chairman Jay Lee, which generated a sentence that was later suspended. But the company is starting to find its way, and there's much more upside on that score than for a business that's already overhauled its governance, according to Mr Grant.
"Do they show some willingness to improve? Yes they do," Mr Grant said. "Not as much as I like, but it's all about small steps."