Perspectives Blog

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…

Specialty pharmaceuticals – The fastest growing category of healthcare spending

Harlan Sonderling, CFA, Senior Healthcare Analyst | January 27, 2014

…ients whose genetic makeup (biomarkers) suggests they will respond to treatment. These pharmaceuticals comprise not only the fastest-growing area of prescription drug sales, but also the fastest-growing area of the healthcare service companies that manage them from distribution to patient administration to payment. Specialty drugs often cost tens of thousands of dollars per treatment year, and, for some rare diseases, can exceed several hundred t…

Labor markets in the new digital age

Columbia Management, Investment Team | April 14, 2014

…7% of U.S. jobs could be automated in the next 20 years, with less impact on those with a higher education and in certain industries that are less vulnerable (Exhibit 1). It is noteworthy that impacts will be felt across many service industries going forward. McKinsey & Company consultants believe future productivity gains will significantly disrupt clerical and professional service jobs. Exhibit 1 Source: The Future of Employment: How Susce…

Thoughts on navigating market volatility in today’s technology markets

Rahul Narang, Senior Portfolio Manager | April 28, 2014

…to a tail spin. Stepping back, there are secular shifts underway in software distribution. The percentage of software to be delivered as-a-service is expected to double from 24% today to 48% in five years. SaaS (Software as a Service) is generally easier to install and maintain versus the traditional legacy vendors and 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…

Not all emerging markets are created equal

Robert McConnaughey, Director of Global Research | January 27, 2014

…ble city-state’s founding father). Keep in mind that even within countries, there are many dynamics at an industry and company level. For example, despite a rocky year for China’s equity markets, investors in Chinese internet service or environmental service companies had a far more positive experience than the broader index. Given the array of reforms introduced after China’s Third Plenum announcements, rapidly changing consumer behaviors and dr…

Signs point to an improving U.S. economy

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | December 9, 2013

…intained its recent strength, a precondition to any taper decision by the Fed. Nonfarm payrolls rose 203,000 in November with prior month’s revisions higher by 8,000. There was a big pickup in goods-producing industries, with service industry gains a touch slower. The former was flagged by rising overtime hours which are now near cycle highs and this typically precedes higher job gains in manufacturing. Further, the ISM Purchasing Managers Index…

More light, less tunnel

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | October 31, 2013

…on the economic situation once the dust settles in 2014. As to the details, I found the employment report soggy with payroll gains near the lower end of three-year ranges. At net gains of 148,000, the weakness was centered in service industries. Among these, leisure & hospitality, retail, health care and business service had been the source of above trend gains earlier this year and now are the source of the softer reads. In particular, Resta…