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 big gains in 2022 by buying cheap stocks during a market crash. For example, one fund rose 45% while the market fell 9.5%. For regular investors, it shows that buying undervalued companies (like Técnicas Reunidas, which might soon improve) when others are panicking can work better than following the crowd. The report also says Azvalor's funds are priced well below their target values, with potential gains of 85% to 100%, but these are just estimates. It's worth reading because it gives real examples of 'being greedy when others are fearful.'
Azvalor's research report notes that in 2022, major U.S. and European stock indices experienced significant declines, while Azvalor's funds delivered outstanding performance, with overall asset management returns ranging from 20% to 40%. Some funds outperformed the market by over 50 percentage point
This chapter reviews the significant decline in major US and European stock indices in 2022, during which the Azvalor funds achieved notable excess returns through their long-validated bottom-fishing stock selection strategy. The report emphasizes that in an environment of high debt, an energy crisis, and 40-year-high inflation, the institution consistently created value through rigorous individual stock research and rotation operations.
The author’s core investment argument is that adhering to a 20-year-validated "surgical" individual stock analysis process—buying high-quality assets at low prices and avoiding market predictions—is key to long-term outperformance. Counterintuitive judgments include: amid widespread market pessimism, the Azvalor funds used high liquidity to increase positions during the market decline in the third quarter of 2022, raising the target value of the Azvalor Internacional fund to €450 per share, implying a potential upside of over 100%.
| Fund | 2022 Return | Benchmark Return | Outperformance | Target Value / Current Price | Potential Upside |
|---|---|---|---|---|---|
| Azvalor Iberia | +19.3% | +0.4% | +18.9pp | €237 / €128 | ~85% |
| Azvalor Internacional | +45.8% | -9.5% | +55.3pp | €450 / €225 | ~100% |
| Azvalor International SICAV Lux | +34.5% | -9.5% | +44pp | €3,646 / €1,817 | ~100% |
This chapter summarizes the performance and strategy adjustments of Azvalor's various funds in 2022, and looks ahead to future investment opportunities. The report emphasizes that against the backdrop of a significant market decline in 2022 (the benchmark fell by 12.8%), Azvalor funds achieved substantial excess returns through deep value investing. Current valuations are at historical lows, providing a high margin of safety for the future.
The author's core investment argument is that the current environment represents the best opportunity for long-term value investors. Azvalor's main funds (Internacional, Blue Chips, Iberia, Managers, Global Value) all have upside potential close to 100%. The counterintuitive judgment is that despite the overall market decline of 20%, the funds have actually enhanced portfolio value by buying high-quality assets at low prices (with some companies' stock prices plunging 40%-50%).
| Company/Asset | Role | Key Data | View |
|---|---|---|---|
| Azvalor Blue Chips | Large-cap value fund | Return +31.4%, target price €348 vs. current price €185 | Bullish, 88% potential upside |
| Azvalor Managers | Multi-manager portfolio fund | Return +0.54%, P/E 4.33x, P/B 0.84x | Bullish, historically low valuation provides high margin of safety |
| Schlumberger, Vale, Tenaris, Glencore | Reduced positions | Reduced due to strong quarterly performance | Neutral (profit-taking) |
| British American Tobacco, Canadian Natural Resources, Petrofac, Bayer, Pan American Silver, Endeavour Mining | Increased positions | Newly added to the portfolio | Bullish |
| B2Gold, First Quantum, Galp, GSK, Liberty Global, Next, Noble Corp | New holdings | 7 new stocks | Bullish |
| Gold Fields, Prosegur Cash, Southern Copper, Teck Resources | Exited positions | All sold | Bearish (exited) |