Viva los petrol: Fund managers converge on oil refiner despite EV transition
Everyone may soon be driving electric vehicles but that doesn’t negate the value of oil and petrol stations in the eye of these investors.
The future of internal combustion engines doesn’t look very bright, but Australian investors aren’t writing off companies exposed to them just yet.
At the Morgan Stanley Australia Summit in Sydney this week, there was a rare moment of unity where all three fund managers present on a panel to discuss opportunities in small caps named Viva Energy as a stock they happily own in their portfolios.
Michael Higgins from Milford Asset Management named the owner of the Geelong oil refinery and several Shell petrol stations among his top stock picks, even though he also predicts many people will be driving EVs within the next 15 years.
“The driver has to spend three to four times longer charging their EV. They’re not filling up, picking up a Mars Bar and heading out. You're actually spending quite a bit of time at these locations,” Higgins said, noting the retail business could operate on a higher multiple.
