Perspectives Blog

Data breaches — What they mean for retailers, consumers and investors

Stephanie Schneider, Equity Research Analyst | September 15, 2014

More than 1,000 retailers have been affected by the same malware that caused Target and Home Depot data breaches. The number of data breaches will continue to increase and cost retailers millions in IT spending and damage control. The cost of a mandated transition to a more secure “chip and pin” payment method has already been included in capital expenditure guidance. Data breaches There have been data breaches at multiple retailers over the l…

Thoughts on navigating market volatility in today’s technology markets

Rahul Narang, Senior Portfolio Manager | April 28, 2014

We are seeing a market rotation from momentum to value on macro factors and internal market dynamics. Keys are to stay diversified, look for businesses with strong moats and that produce solid cash flow and compare to historical valuations. Favored themes are industry consolidation plays, mobile and Internet. In recent weeks there has been a dramatic shift in alpha generation from hyper growth technology stocks to more value-oriented names. We…

Beware of earnings gimmicks

Jason Wang, Senior Quant Analyst | March 10, 2014

The combination of slow revenue growth, high existing margins and increased multiples creates incentives for more aggressive accounting. Stocks with the lowest accounting accruals outperformed their benchmark by 2.7% per year between 1993 and 2013. History suggests that paying close attention to changes in earnings quality can be of significant value for investors. Since the global financial crisis, economic recovery worldwide has been slow. O…

Finding opportunity in Japan’s recovery

Robert McConnaughey, Director of Global Research | September 29, 2014

In Japan, there is general optimism for a steady economic recovery, with a prevailing sense of confidence in reasonable valuations and a low bar for incremental improvement. Companies that can take advantage of global business opportunities look far more attractive than those simply waiting for a rising national tide to lift their boats. A re-allocation towards riskier assets from the national pension funds and insurers would create very large…

Biotech’s beneficiaries: How outsourcing is improving the sector and spreading the wealth

Aaron Reames, Senior Equity Analyst | February 24, 2014

Conditions favor biotech outperformance of broader markets for at least a few more quarters. Outsourcing offers biotech firms varied advantages, from cost reduction to enhancing credibility. The sector’s success and the outsourcing trend is fueling ancillary businesses, notably specialty REITs, CROs and research tools companies. As biotech indices continue to surpass all-time highs, one must contemplate if there is additional room to run. We c…

A tepid cyclical lift

Tom West, Director of Equity Research | April 28, 2014

Cyclical investment and discretionary spending are on track to deliver earnings growth of 7% in the S&P 500. Strength in some consumer durables appears more of a “wallet share” gain than a general lift due to recovering wages or a release of excess savings. Construction and energy are poised for another year of growth, while “enterprise” spending and investment in the tech sector remain challenged. The S&P 500 Index should grow earning…

The case for active muni management

Kimberly Campbell, Senior Portfolio Manager | April 21, 2014

Muni bonds represent an attractive investment opportunity Active management is a value add in these volatile markets Professional money managers can help investors navigate an ever-changing environment Where does one invest in a world of uncertainty? Rising taxes, volatile markets, low yields, economic stagnation, geopolitical unrest. We live in a world of great uncertainty — yet our investment goals remain the same: a comfortable retirement,…