SoftBank (SFTBY) surprised the market this summer when it announced the purchase of chip-design specialist ARM Holdings (ARMH) for $32 billion. That's just the opening gambit in a long game for the Japanese telecom investor, says Benjamin Beneche, portfolio manager for the ASTON/Pictet International Fund.
"It's a really meaningful long-term acquisition because it opens up SoftBank to the Internet of Things," says Beneche. "It's a brilliant business."
The takeover of ARM gives SoftBank a company whose semiconductor know-how is used in 95% of feature and smartphones globally and increased clout to compete in the growing market for connected devices. The purchase marked a dramatic departure from SoftBank's recent asset-sale drive, which has included a June deal worth $7.3 billion to sell its majority stake in Finnish games maker Supercell to Tencent and co-investors, and the sale of $8.9 billion worth of Alibaba (BABA - Get Report) securities, bringing down its holding to about 28%.
The ASTON/Pictet International Fund is up 4.6% thus far in 2016, according to Morningstar. The $1 billion fund has returned 5.2% in the past 12 months, outpacing 88% of its rivals in Morningstar's foreign large blend category.
Royal Dutch Shell (RDS.B - Get Report) is another one of Beneche's best bets. Shares of the energy giant are up 10% thus far in 2016, helped along by the rise in natural gas prices. Royal Dutch Shell became the leading natural gas producer when it completed its $53 billion acquisition of BG Group earlier this year.
"This BG deal was entirely transformational for their business," says Beneche. "It made their business more stable with growth in the future and we feel it helps sustain their dividend."
Beneche is also bullish on GlaxoSmithKline (GSK - Get Report) , which has seen its shares rise 7% year to date. Beneche says the drug giant's shift to consumer-based products and vaccines helps insulate it from the drug-pricing debate, hurting pharmaceutical stocks in the U.S.
Finally, Beneche is positive on ASML (ASML - Get Report) , up 15% year to date, saying the semiconductor equipment-maker will not be hurt by the Samsung phone fire fiasco. Last week Samsung announced it is selling about 6.3 million shares in ASML for about $681 million. Samsung says in an August regulatory filing it owned a 2.9% stake, or 12.6 million shares, in ASML.
"Samsung is an important client, but ASML has exposure to the whole value chain," says Beneche.