Perspectives Blog

Predicting new drug sales is more art than science

Harlan Sonderling, CFA, Senior Healthcare Analyst | April 14, 2014

Predicting sales of new medicines is highly inaccurate and subject to significant and often costly errors. While investment analysts can draw on research tools and experience, history suggests new drug forecasting will remain more art than science. Despite the high level of uncertainty and variability in new drug forecasts, the innovative medicine industry is alive and well. Predicting sales of new medicines is highly inaccurate and subject to…

Retail sector outlook – It’s a share game

Mari Shor, Senior Equity Analyst | March 17, 2014

…supply chain expertise to gain market share. Recent data points across the consumer space have been mixed, and retailers and investors are struggling to sort through the noise to determine underlying demand. To recap 2013, apparel retailers underperformed other sectors within consumer discretionary from a sales and stock perspective given payroll tax headwinds and lack of fashion newness. December and January sales were worse than expected for…

Apparel retail doldrums

Mari Shor, Senior Equity Analyst | August 11, 2014

Since 2011, consumer spending has been below average overall, and spending on retail apparel has been especially poor. A host of factors, from shifting consumer priorities to poor inventory control have forced apparel retailers to compete on price, and sales and profitability have suffered dramatically. Premier global brands with differentiated product and strong, flexible supply chains are best positioned to manage through this challenging env…

The perils and pitfalls of buying individual municipal bonds

James Dearborn, Head of Municipal Bonds | February 27, 2014

Volatile ratings leave retail investors at risk Retail investors could pay higher prices Deck is stacked against retail investors With an increasing focus on the benefits of owning municipal bonds — attractive after-tax yields, low historical default rates and relatively low volatility — investors are again considering purchasing individual muni bonds. But the deck may be stacked against the retail investor. The allure of owning individual bon…

Digital dining: How restaurants are applying technology to drive sales

Daniel Spelman, Equity Analyst | February 24, 2014

…he will be stepping away from day-to-day management of the business to focus on “innovation and next generation retailing and payments initiatives.” Starbucks is one of the few retailers that will soon have a digitally enabled loyalty program shared across brands and channels, from owned stores to purchases of packaged coffee made at grocery stores. In August of 2012, the company formed a partnership with mobile payments startup Square that will…

What’s behind the weakness in U.S. housing?

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | March 24, 2014

…ds. Many have shifted into even lower-priced homes, confirmed by data that show a big jump in the share of homes sales in lower-priced tiers. First-time homebuyers are a key to sustaining the housing recovery and their share (as a % of total home sales) is at the lowest point this cycle, indicating they are being priced out of the market. Tighter homeowner financing rules also came into play recently in conjunction with new regulations emanating…

Thoughts on navigating market volatility in today’s technology markets

Rahul Narang, Senior Portfolio Manager | April 28, 2014

…d should not be considered just a fad. At the peak of the last bull market SaaS stocks traded around 5.6x EV/NTM sales (enterprise value to next twelve month’s sales) on average. The market has been willing to pay a premium for the faster growing SaaS stocks. Six weeks ago, SaaS companies forecasting 30%+ revenue growth traded at approximately 12x EV/NTM sales, and trade at approximately 8x EV/NTM sales today. We have seen the largest downdraft i…