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…

Detroit bankruptcy — One year later

Ty Schoback, Senior Municipal Analyst | August 18, 2014

…on argument for why UTGO bondholders accepted less than 100% recovery is Detroit’s tax base was deemed too dilapidated to carry through with the bond indenture pledge to “levy ad valorem property taxes sufficient to meet debt service, without limit as to rate or amount.” There is no question Detroit’s tax base has suffered significant erosion. However, that argument remains an open question when considering the full terms of the settlement. While…

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…

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

Paul DiGiacomo, Senior Analyst | August 18, 2014

…ombat rising fulfillment costs, which jumped 30% in the first half of the year. Here, the company is moving from UPS and FedEx to their own trucks in urban markets, regional parcel carriers in the suburbs, and the U.S. Postal Service in rural areas in an effort to provide comparable service at a lower cost. A benign inflation outlook suggests that revenue growth for most will come from volume, not price. As a result, companies in competitive indu…