azvalor Asset Management is a Madrid deep-value boutique founded in 2015 by Álvaro Guzmán de Lázaro and Fernando Bernad, formerly the core of Bestinver's investment team in the Graham tradition. It is known for contrarian concentration in unloved cyclical assets — gold and silver miners, oil services, uranium — buying into panic and exiting once value is realized. Its flagship international fund is about 70% of firm AUM and has more than tripled since inception a decade ago; letters were quarterly from 2016-2022 and semiannual since 2023.
This report explains how Azvalor funds made money in the first half of 2022, when global stocks had their worst start in decades. Their secret: buying cheap assets and selling when prices rise. For example, they sold Canadian Natural Resources at $70 per share and bought it back at $45. For regular investors, this means staying calm during market drops and focusing on undervalued companies can pay off. The report also notes that the gap between expensive and cheap stocks is at extreme levels, similar to before the 2000 tech bubble, suggesting value stocks might outperform. It’s worth reading because it shows real examples of profiting in a downturn.
Global major stock markets experienced their worst start in decades: U.S. stocks fell -20% in the first half of the year (the first time since 1970), the MSCI ACWI Index recorded its worst first-half performance since its launch in 1990, and U.S. bonds also posted their worst start since the 18th ce
This chapter discusses how the Azvalor funds achieved significant excess returns through a value investing strategy in the first half of 2022, against the backdrop of global stock markets experiencing their worst start in decades (U.S. stocks fell -20% in the first half, the MSCI ACWI index posted its worst performance since its launch in 1990, and U.S. bonds recorded their worst start since the 18th century). The report emphasizes that the sharp market decline validates the core position of the investment philosophy of "buying cheap."
The author's core investment argument is: "Buying cheap is the only thing that matters in investing." This is both the cornerstone of Azvalor's investment philosophy and the key to its strong performance in a bear market. Counterintuitive judgments include:
| Company/Asset | Role | Key Data | Bullish/Bearish |
|---|---|---|---|
| Canadian Natural Resources | Buyback case | Sold at $70/share, bought back at $45/share | Bullish |
| Tubacex | Largest holding in Azvalor Iberia | Share price rose from a low of €1.50 at the start of the year to €2.60 in early June | Slightly reduced |
| Técnicas Reunidas | Second-largest holding in Azvalor Iberia | No specific data provided | Bullish |
| Prosegur Cash | Increased holding | No specific data provided | Bullish |
| Mapfre | Increased holding | No specific data provided | Bullish |
| Línea Directa Aseguradora | Increased holding | No specific data provided | Bullish |
| Vale | New addition to Azvalor Internacional | No specific data provided | Bullish |
| Bayer | New addition to Azvalor Internacional | No specific data provided | Bullish |
| Centrais Eléctricas Brasileiras | New addition to Azvalor Internacional | No specific data provided | Bullish |
| Kinross Gold | Fully sold | No specific data provided | Bearish |
| Iamgold | Fully sold | No specific data provided | Bearish |
| Chesapeake Energy | Reduced in Azvalor Blue Chips | No specific data provided | Bearish |
| Carrefour | Reduced in Azvalor Blue Chips | No specific data provided | Bearish |
This chapter focuses on the performance and strategy execution of Azvalor's funds under the extreme market conditions of the first half of 2022. The report notes that global stock markets experienced their worst start in 50 years, but Azvalor successfully protected investor savings and achieved significant positive returns by adhering to its core philosophy of "buying high-quality assets at low prices."
The author's core investment argument is: In a bear market, adhering to a deep value investment strategy (buying low, selling high) not only protects capital but also generates excess returns. The counterintuitive judgment is that the fund actively sells during rallies to accumulate high liquidity, rather than passively holding, thereby reserving "ammunition" for reinvestment during subsequent market declines.
| Indicator | Data |
|---|---|
| Azvalor Global Value First-Half Return | +28.2% |
| Current Share Price (July 19) | €158/share |
| Target Value | €336/share |
| Potential Upside | >100% |
| Asset Size | €119M (end-June) |
| Number of Co-Investors | 2,200+ |
For investors, the report suggests: In the current environment of extreme market pessimism and low valuations, patience should be maintained and buying opportunities actively sought. The specific direction is to focus on funds or assets that embody deep value and whose managers can generate excess returns through disciplined operations (selling on rallies, buying on dips) during bear markets. The report emphasizes that the fund's current potential upside exceeds 100%, presenting a favorable opportunity for long-term positioning.