Perspectives Blog

Quality milestone in the European recovery story

March 17, 2014

Business, economic and political news all point to a strengthening recovery in Europe. We foresee a period of low inflation and low interest rates in Europe. We favor domestic European plays over internationally-exposed stocks, with an overweight stance in banking and telecoms. By Paul Doyle, Head of Europe ex. UK equities and Frederic Jeanmaire, Fund Manager, Threadneedle Investments After 18 consecutive negative months, the flow of eurozone…

Has dividend investing lost its luster?

Columbia Management, Investment Team | May 12, 2014

Higher-yielding equities underperformed the market last year raising questions about whether dividend investing remains an attractive strategy. Even if rates continue a long-term increase from current levels, we expect that equities sensitivity to rising rates will decline. We believe the drivers that have resulted in historical stock market outperformance from high-yielding equities remain intact. By Paul Stocking, Senior Portfolio Manager an…

The Yellen Fed

Zach Pandl, Portfolio Manager and Strategist | October 9, 2013

…tement: many people believe the Fed should be much more aggressive than it is today, and that the idea of tapering QE was a folly. But I think most economists would agree that Yellen falls to the left of center—e.g. closer to Paul Krugman than John Taylor, and probably closer to Krugman than Greg Mankiw. Pivot to the center: That being said, watch for a possible pivot to the center from Yellen in her public comments over the next couple of months…

Finding the sweet spot — Value investing along the muni yield curve

Paul Fuchs, CFA, Portfolio Manager, Municipal Bonds | August 27, 2014

We look for securities that offer a balance of credit fundamentals and yield. We use a “roll-down” analysis to identify the sweet spot on the yield curve. We believe yield curve positioning is the largest driver of returns for intermediate municipal portfolios. The cornerstone of the Columbia Management municipal investment process is identifying relative value opportunities. As we construct and manage portfolios, a relative value component is…

Where’s Waldo? Be on the lookout for rising costs in a low growth world

Paul DiGiacomo, Senior Analyst | August 18, 2014

Broad measures of cost inflation (PPI and CPI) growth rates have remained near 2% for the past three years. Sharp increases have occurred in isolated areas like trucking, but the effect is far-reaching. Investors must be on the lookout for accelerating expense growth within a company or industry cost structure, as high inflation can lead to lower stock returns. Over the past three years, Producer Price Index (PPI) and Consumer Price Index (CPI…

Every day is an Amazon delivery day

Paul DiGiacomo, Senior Analyst | December 19, 2013

With the rise of e-commerce, the revenue mix for parcel delivery is shifting from businesses to the consumer. Growth in residential packages helps UPS and FedEx volume but challenges profitability. If Amazon succeeds in disintermediating UPS and FedEx, other large shippers will follow. Recently, Amazon announced that it will partner with the United States Postal Service to deliver goods to its Prime subscribers on Sundays. The company will lau…

The cons of pro forma earnings

Paul DiGiacomo, Senior Analyst | January 7, 2014

Analysts assimilate data from many sources to evaluate a company’s underlying earnings potential. Over the last 20 years, company managements have adjusted generally accepted accounting principles (GAAP) results to aid analysis. As pro forma earnings proliferate, analysts must carefully evaluate treatment of reported results. As the fourth quarter comes to a close, analysts are adjusting their earnings estimates for the final months of the yea…