James Rodda is portfolio manager of Antipodes Partners’ global small and mid-cap fund. The firm manages over $20 billion in assets.
Click here to read this article on The Australian Financial Review website.
What’s a stock you like and own that (most) people haven’t heard of?
Few would have heard of GCC, a Mexican-listed cement producer that’s also among our fund’s top 10 holdings – 25 per cent of its business is in Mexico, while about 75 per cent comes from the US.
Its US cement plants are inland, which effectively insulates the business from imported cement that enters America from coastal ports. This is a big geographic advantage that provides sustained pricing power, regardless of whether tariffs last two years or 10 years. This advantage is reflected in GCC’s superior return on invested capital compared to its peers.
GCC is currently completing construction of a new Texas plant, which will lift free cash flow yield to around 13 per cent. The stock trades on double the free cash flow yield of US-listed heavy construction materials peers, despite having better assets and being well-positioned to be a winner from a US investment cycle that President Trump is keen to engineer.
Which stock in your fund has the most near-term upside?
In the current market, big near-term upside is emerging from stocks that shift from being deemed a loser amid the rise of artificial intelligence to becoming an AI winner. One stock we think is poised to make this shift is the New York-listed Semrush, another top 10 holding in the fund.
Semrush is the leader in search engine optimisation, or SEO, software – the process of helping website content get more organic traffic without paying for ads. People think Google Search is shrinking, and therefore, Semrush will shrink. However, SEO traffic is incredibly cheap compared to Google or Facebook ads, so even if traffic fell by 70 per cent, it would still make sense to prioritise SEO over paid advertising.
Around 1 per cent is spent on SEO versus search ads, yet clicks are 15 times bigger traffic drivers versus paid clicks – that makes the core very sticky for enterprises, so I don’t agree with the market’s bear case.
The kicker is Semrush is one of the first to market with AI optimisation, which is about ensuring your brand, content, or product ranks positively in AI searches on ChatGPT and Gemini. These large language models use similar enough credibility ranking methods to Google, so Semrush is in the box seat to win that market with its advanced web crawling. Companies will continue to pay for the core Google search tool, then add new modules for AI optimisation as marketing chiefs focus on AI search results.
The stock is currently trading on an ex-cash next 12 months price to earnings ratio of 15 times and is still growing nearly 20 per cent before revenue from AI optimisation has even kicked in. This is a very asymmetric set-up, and a flip to the “AI winner” bucket could see estimates and multiples move up significantly.
Why do you think investors should look beyond ASX small caps and consider global?
Most of the world’s top-performing stocks are found outside Australia. Many clients are looking abroad for exposure to smaller companies. The challenge, of course, is the universe is vast and complex. We are launching an active-ETF version of our fund on the ASX next month, which will give investors access to a portfolio of what our team identifies as the best small and mid-cap opportunities. The fund has been the best-performing fund in its strategy class since inception nearly three years ago.
What one piece of advice has influenced your approach to investing?
I read Peter Lynch’s book One Up on Wall Street in grade 6. It still contains the best advice I use every day. The book teaches you that stocks follow earnings and that earnings follow the product demand. So, understand products deeply and focus on why customer trends and preferences change. That advice is critical.
Are there any podcasts that you’d recommend?
I’m a big fan of industry podcasts that get you into the weeds from experts, giving you insider, real-time insight of industry change, rather than high-level surface concepts. SiliconANGLE by the Cube is one I would name. It’s brilliant for tech.
What is your favourite local bar/restaurant?
Café Sydney. An outdoor table with my wife, Sam, a great view of the harbour – you can’t really get any better.
This article was written by Joanne Tran and published by The Australian Financial Review on October 23, 2025.
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