Quality Growth Boutique

Like the end of a long evening of revelry, the decline in the fortunes of momentum growth and value companies leaves the Quality Growth investors, in our opinion – still standing. Companies with pricing power, low debt, and consistent earnings may be the slow but steady winners in the race to beat the market.

Bear markets do not send advance warnings. But investors can pay attention to red flags. Valuation multiples are well above the long-term average and consensus estimates are bullish on earnings growth. The good news is that investors can prepare for macro uncertainty and minimize capital loss.

As pressure has been building on Chinese technology stocks given growing regulatory threats, some of the key players in the Chinese internet sector are shifting to a more prudent strategy, pulling back to focus closer on the core business rather than investing in new growth areas.

Can iPhone growth keep up after a super cycle? What will be Apple’s next major new product? With a mixed track record of launching new services, regulatory risks to the current App Store model, and a valuation that is not compelling, investors should be concerned around Apple’s future growth.

Central banks must temper inflation at a time of geopolitical crisis, historically high valuations, slowing economic growth, declining equity markets, and a flattening yield curve – clearly not an environment for the faint of heart. Quality growth stocks, relative winners during times of persistent inflation, can be a portfolio stabilizer in challenging times.

What do Tiffany jewelry, Gerber baby food, and Milwaukee power tools have in common? They are all iconic American consumer brands owned by non-US based companies. In our view, US index funds and active managers that invest only in US-based companies are missing out on some American gems.

What does Russia’s invasion of Ukraine portend for China and Taiwan? How do you identify quality companies amid unpredictable regulatory and political environments? How should you consider absolute risks on a country level? Cheryl Gedvila, Client Portfolio Manager, addresses these difficult questions to help investors navigate markets today.

Last year the Fortune 500 had a record 41 women CEOs. Yet US women earned just $83 for each $100 by men on average, reflecting the corporate ladder’s ‘broken rungs.’ This blog looks at female led company profiles, workplace headwinds for women, and ways to improve the flow of meritocracy.

Unglamorous stock research, resisting the whims of the markets, and preparing for the worst can be downright boring. But it’s a great way to find quality international companies that can help reduce portfolio risk and improve downside protection – exciting results during these uncertain times.

Market sentiment reflects growth that will continue at past levels, yet economies and businesses globally are facing stiff headwinds – high government debt, rising inflation, and supply chain bottlenecks. As markets shrug off risks, expect volatility and a divergence in company performance in 2022.

The latest plot twist of the pandemic may have spooked markets in recent days, but the underlying sentiment is still one of worrying exuberance and investors are overlooking businesses in the consumer staples, health care and discretionary sectors that are still in the process of normalizing.

Local know-how goes a long way in emerging markets (EM). Regional e-commerce and consumer companies are increasing market share by adapting to local preferences. Some quality companies are benefiting from this and other EM trends, such as expanding demographics in the online gaming market and rising barriers to entry in semiconductors.