June 24, 2016

Brexit Fallout: Global Uncertainty to Weigh on Multiples

Uncertainty has increased materially in key regions of the World. In the U.K., Brexit uncertainty could drag on for a few years. Globally, the next big uncertainty surrounds the U.S. presidential election, although that issue will be clarified in a few months.

June 2, 2016

Regional and Sector Strategy: Monthly Update

Executive Summary Upgrade U.S. to Overweight from Neutral. Earnings estimate revisions turned sharply positive, adding to other favorable fundamentals including margins, share buybacks. Information Technology: Still Neutral; Earnings Outlook Remains Unfavorable. We downgraded Information Technology to Neutral last month reflecting, in part, negative earnings estimate revision trends and a deceleration in expected earnings momentum. Both… Read more »

May 26, 2016

An Atypical Analysis of Industry Risks

Most investors focus on tangible income statement and balance sheet items, but intangible factors can be material too.

May 2, 2016

Regional and Sector Strategy: Monthly Update

Our earnings momentum metric has been refined. In addition, we have also introduced a methodology for weighting ESG factors in sectors and regions. These modifications have resulted in an unusually large number of changes in recommendations.

April 7, 2016

Global Equity Strategy: Have You Put On Weight?

There is no consensus about the weight to be given to ESG factors in investment decisions. We have taken a first step in addressing this issue.

April 4, 2016

Regional and Sector Strategy: Monthly Update

Energy and materials are still sinking; Japan at some risk of becoming a “value trap”; ESG weightings affect our views on Russia and US.

March 1, 2016

Global Earnings Synthesis: On Track for Modest Gains in 2016

Building on the recent analysis in our Regional and Sector Strategy: Monthly Update, we continue to embrace an outlook for just a single-digit increase in profits in 2016, which is in contrast to consensus estimates that imply a 21% gain in earnings.

March 1, 2016

Regional and Sector Strategy: Monthly Update

We remain Overweight Information Technology (largest weighting in Overweight North America region) and Consumer Discretionary (largest weighting in Japan, our other Overweight). We continue to avoid regions with heavy exposure to commodities, most notably Latin America (Underweight), South Africa and Russia (both ranked Neutral).

February 22, 2016

Country Valuation: An ESG Synthesis

Effective national governance (“G”) facilitates a country’s efficient transformation of environmental resources (“E”) into wealth. Both are strongly influenced by social factors (“S”). By way of example, France’s social objective of maintaining a rural economy necessitates heavy government intervention and likely detracts from its potential for economic development.

February 10, 2016

Supreme Court Ruling Highlights Clean Power Plan’s Potential

On February 9, 2016, the US Supreme Court (SCOTUS) granted a stay to the implementation of the CPP rule by the US Environmental Protection Agency (EPA). In our view, the intensity of the challenge from the states and certain industries, and the SCOTUS ruling that CPP should be halted while being litigated, demonstrates that the CPP has significant implications for the sector.