Reflecting on the 2024 stock picks, several ideas have delivered strong returns over the past year. The top performers include Coeur Mining (CDE.NYSE), Tencent Music (TME.NYSE), and Airbus (AIR.EPA), each demonstrating how a strong investment theses and disciplined execution can generate meaningful outcomes. Learn more from the fund managers behind these ideas as we revisit their original thesis and the catalysts that played out.
Coeur Mining (CDE.NYSE)
Pitched by Jeremy Bond of Terra Capital
The original thesis around Coeur Mining was that the stock had been beaten down while they were developing and bringing on-line the significant Rochester mine site. At the time, the balance sheet was stretched with the net leverage ratio at almost 4x. However, by November 2024, Rochester had been commissioned and was producing, so teething problems were out of the way. At the same time the business had added the Las Chispas mine through the acquisition of Silvecrest.
Jeremy Bond was also bullish on the silver price, which has doubled since pitching the name. The company has started to generate significant free cash flow and continues to pay down debt. The net debt ratio now siting at 0.12x. Both catalysts have played out well - a deleveraging story with commodity tailwinds.
Watch Jeremy’s 2024 Sohn Hearts & Minds stock pitch.
Airbus (AIR.EPA)
Pitched by Vihari Ross of Antipodes Partners
Airbus delivered results in line with Vihari's investment thesis over the last year with annual delivery estimates increased to 820 commercial aircraft for 2025 amid a gradual easing of supply chain constraints, particularly around the LEAP engines used in its Narrow Body aircraft i.e. the LEAP engine deliveries from GE / Safran are up 40% year on year.
Airbus will also complete the acquisition of Spirit AeroSystems which secures supply to key industrial components including fuselage, pylons and wings particularly for the A220 series.
At the Q3 results in October, operating earnings beat expectations by 10% with strength across all divisions and margin expansion. Full year guidance was also reiterated despite the impact of tariffs which represented an underlying upgrade and implies an acceleration of deliveries in 4Q to 313.
As such the markets confidence in the easing of constraints and ongoing ramp of deliveries to >900 from 2026 and approaching 1,000 by 2027 has grown, as has confidence on margin delivery driven by operating leverage, overstaffing recovery and improved mix, including pricing on the new A319/20/21 XLR series. This has driven a re-rating in the stock over the year.
AIR's dividend return range has also increased to 30-50% with the net cash position well in excess of the €10bn threshold for the group.
A further tailwind for the stock in 2025 has been its Defense business which is 20% of sales and is expected to generate strong profit growth as a result of renewed European government spending programs and as such Defense and Space are expected to contribute $1bn in profits by 2028. Airbus will also extract value in its space business via its recently announced MOU in creating a combined dominant European space business with Thales and Leonardo by 2027.
Watch Vihari’s 2024 Sohn Hearts & Minds stock pitch.
Tencent Music (TME.NYSE)
Pitched by Samir Mehta of Jo Hambro Capital Management
The fundamental drivers for Tencent Music’s subscription for music business (similar to Spotify) were in place, but they faced massive regulatory crackdown on their second line of revenues from ‘social music’.
During 2020-2023, management actively reduced the social music business. They reengineered the music subscription business to focus on increasing exclusivity around artists and expanding variety of music content. This drove a steady increase in average revenue per user, growing 5-6% pa in a deflationary environment. They cut selling and marketing expenses by 70% yet grew paying subscribers by 3-4% pa. Combined with a more sophisticated advertising strategy, they have delivered a 17-20% revenue growth, increased gross margins from 40 to 44% and generated large expansion in cash flows.
Watch Samir’s 2024 Sohn Hearts & Minds stock pitch.
To learn more about the upcoming Sohn Hearts & Minds Conference or to purchase tickets, visit sohnheartsandminds.com.au.
