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 the Azvalor Blue Chips fund works. The fund's value per share is €301, but it trades at only €140, meaning there's over 110% upside potential. The manager uses a clever strategy: selling stocks that have reached fair value (like uranium and fertilizer companies) and buying undervalued ones, keeping the fund's safety margin high even as markets rise. For regular investors, this suggests the fund may still offer good returns if you trust the manager's judgment. But be aware: the fund is concentrated, with the top 15 holdings making up 63% of assets, which adds risk.
The Azvalor fund continued its upward trend in the fourth quarter, significantly outperforming the index for the full year. The report's core argument is that the valuations of companies in the portfolio remain attractive, while most stocks in the market are overvalued. As of year-end, the estimated
This chapter focuses on the investment logic and current valuation status of the Azvalor Blue Chips fund. The fund is highly similar in strategy to Azvalor Internacional, but its holdings are more concentrated in large-cap stocks (weighted average market cap of approximately €20 billion), with fewer companies (41 vs. 70) and a higher concentration in the top 15 holdings (63% vs. 59%). At the time of the report's writing, the fund's value per share (VALUE) is €301, while the current price (PRICE) is €140, implying an upside potential of over 110%.
The author's core judgment is that the current price of Azvalor Blue Chips is far below its intrinsic value, still offering significant upside potential. Counterintuitively, although the fund has risen with the market, through "portfolio rotation" (selling stocks near fair value and buying high-quality companies with declining prices), the fund has maintained an upside potential similar to that of Azvalor Internacional (both exceeding 110%), without losing its margin of safety due to price increases.
| Indicator | Azvalor Blue Chips | Azvalor Internacional |
|---|---|---|
| Value per share (VALUE) | €301 | €355 |
| Current price (PRICE) | €140 | €155 |
| Implied upside potential | >110% | >120% |
| Number of holdings | 41 | 70 |
| Top 15 holdings concentration | 63% | 59% |
| Weighted average market cap | ~€20 billion | Not disclosed |