2 min read | by Glenn Cunningham | I recently attended the Industrial Manufacturing Technology Show (IMTS) in Chicago to gain further insight into the technology and industrial industry ecosystems. Discussions at the show reinforced a number of key themes that we have independently identified through our bottom-up research. Broadly speaking, these include the need for more automation due to skilled labor shortages, the costs and benefits of supply chain fragmentation, and the growing integration of technology across the industrial landscape.
8 min read | by Rich McCormick | I spent two weeks in June traveling throughout Europe, engaging with a range of old and new contacts – political leaders, regulators, and management teams from over 40 companies in the insurance, banking, fintech, and industrial sectors. Throughout the trip and upon my return, I kept this journal of the most significant takeaways and implications for our portfolio positioning – some reinforcements to previously-held beliefs and a few surprises.
7 min read | We continue to view the ASEAN region as one of the best sources of investment opportunity in emerging markets, presenting a unique combination of attractive valuations, recovery potential, and sustainable long-term growth. Within the region, and considering both short- and long-term potential, we believe Vietnam is one of the most promising investment plays, unfolding in five acts. Alice Popescu, Portfolio Manager, has written a synopsis of the play, building a case for investors to embrace the opportunity in Vietnam.
5 min read | by Alice Popescu | I recently returned from my first post-pandemic due diligence trip to Mexico. While virtual meeting platforms proved to be a blessing during travel lockdowns, nothing compares to the insights gained and relationships that can be developed during a quality research trip. Travelling across three major economic zones and two time zones, I visited with 15 companies, public and private, as well as a vast array of policymakers and political observers. Broadly speaking, the infrastructure improvements, economic environment, services industry recovery, and opportunities linked to an overarching trend of “nearshoring” were impressive.
1 min read | Stock-based compensation (SBC) in the technology sector has proliferated in recent years, driven by the war for talent and a period marked by low cost of capital, plentiful access to capital, and rising valuations. The challenge comes when decade-long market tailwinds begin to change direction. The virtuous cycle of aggressive stock issuance to employees, elevated ‘adjusted’ earnings, rising stock prices, and strong employee engagement can become vicious when it unwinds.
2 min read | In thisarticle [click to read], we present a series of three snail charts that illustrate the evolution of corporate earnings growth estimates from 2016 through the 2023 forecast season in the US, Europe, and Japan - and discuss why we believe the data represents dangerous trend extrapolation. We expect the outlook for many companies’ earnings to come under pressure as the year progresses owing to slowing revenue growth, increasing cost pressures, and lofty embedded expectations.
4 min read |This morning the FT published an article [click to read] regarding the broadening out of market leadership and the protection that value stocks have provided for investors during the tumultuous start to 2022. These topics resonate here at Altrinsic and have been key themes in our market commentaries over the past several years. Beyond the narrative, the FT's simple charts also tell a compelling story.
2 min read | After a decade of largely running in parallel, credit and equity markets have begun to diverge in 2022. Check out our article [click to read] for some supporting data and thoughts about why equity investors should be paying close attention to credit market dynamics.
3 min read | Hypersonic weaponry is one of the most disruptive technologies in modern defense. We recognize that this is a controversial, sensitive, and potentially polarizing topic for multiple reasons, especially given the ongoing war in Ukraine. Yet, given the significant resources governments are committing to hypersonic research and innovation, we felt it would be valuable to provide a brief, fact-based review of hypersonic technology, its history, and the potential implications from both geopolitical and industry standpoints. Our sole intent is to provide an educational overview.
2 min read | Large-cap growth stocks continued to outperform in 2021, leading the average global stock to underperform the MSCI World Index by 6.9%, the worst figure since 1999 and the fourth year in a row of underperformance. This narrow leadership has hindered active global equity managers, but as we enter 2022, the environment is looking increasingly supportive – particularly for bottom-up, fundamental investors. Check out our article[click to read] to find out why.