River & Mercantile's Lough looks to 'the rubbish tip' for value opportunities

DFS holding expected to 'materially increase'

UK equity market dispersion is at its highest levels since the TMT bubble, which has led to opportunities within "companies in the discarded bucket" for which the "fundamentals are better than the market thinks", according to portfolio manager of the ES R&M UK Dynamic Equity fund William Lough.

Lough, who took over from former colleague Philip Rodrigs in April 2018, identified furniture retailer DFS as a stock that the market has mispriced, with the capacity to "materially increase" market share in any downturn. The £543m market-cap firm's share price ballooned nearly 40% in the month leading up to 25 December 2019, but has since fallen by around 11%, largely owing to the equity markets sell-off seen in recent weeks. R&M appoints ex-Pioneer's Hanratty to lead global distribution It remains 25% shy of its November 2015 share price peak of £3.47. Lough said: "DFS and...