Kim Bolton, president and portfolio manager, Black Swan Dexteritas
FOCUS: Technology stocks
Top Picks: Oshkosh, L3Harris Technologies, SentinelOne
MARKET OUTLOOK:
One factor investors need to be prepared as we head into the end of July and the 2024 fall season is the seasonality sentiment. Breaking out the S&P 500 Index’s August/September/October performance over the last ten years shows that while overall returns are negative, there has been a lot of dispersion. In six of the last ten years when the S&P 500 was lower, it declined at least 1.2 per cent. Conversely, in three of the four years when the S&P 500 was higher, it gained at least four per cent. Whatever you do, buckle up.
While the market searches for the next fundamental catalyst or technical signal, your BSD Global Tech Hedge Fund and Separately Managed Accounts will continue to trim those securities that are achieving their respective intrinsic values, and buy those technology stocks that exhibit longer, more lucrative investment runways. The hedging overlay will always be an important tool to protect your capital in bearish markets, and also an important tool to be “dialled-down” in bullish markets.
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TOP PICKS:
Oshkosh (OSK NYSE)
Founded in 1917, Oshkosh Corporation has over a century of experience in manufacturing specialty vehicles and equipment. It has four key segments including access equipment, defence, fire and emergency as well as commercial.
L3Harris Technologies(LHX NYSE)
L3Harris Technologies was formed in June 2019 from the merger of L3 Technologies and Harris Corporation, creating a leading defence technology provider. The company is headquartered in Melbourne, Florida, with additional major facilities and offices spread across the United States and internationally. The company employs approximately 48,000 people, including many engineers and scientists, highlighting its strong focus on innovation and technical expertise.
L3Harris produces a wide array of products, including tactical radios, avionics, night vision equipment, space and airborne systems, and cyber defence solutions. A significant portion of its business is focused on providing advanced technology solutions for defence and national security applications, including C6ISR systems. The company is a key player in the aerospace and space industries, providing technology and systems for satellites, space exploration, and commercial aviation. L3Harris invests heavily in research and development, spending over US$1 billion annually to advance its technology and maintain a competitive edge.
SentinelOne (S NYSE)
SentinelOne Inc. provides a comprehensive cybersecurity platform known as Singularity, which leverages artificial intelligence to deliver autonomous threat prevention, detection, and response capabilities. The platform includes endpoint protection, cloud security, identity security, and mobile endpoint security. Additional services include vigilance MDR (Managed Detection and Response) and Watchtower threat hunting.
The company’s Extended Detection and Response (XDR) data stack fuses together the data, access, control, and integration plans of endpoint protection platform, endpoint detection and response, cloud workload protection platform, and IoT security into a centralized platform.
SentinelOne serves a wide range of industries, including finance, healthcare, energy, higher education, and manufacturing. Their cybersecurity solutions are used globally, protecting organizations’ endpoints, cloud workloads, and identities from cyber threats.
Grand View Research estimates that global cybersecurity spending was US$185 billion last year and will grow by an average of 12 per cent annually through 2030. SentinelOne’s revenue growth is much faster; it’s a sign that SentinelOne is taking business from others in the industry, a testament to the product’s value.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| OSK NYSE | Y | Y | Y |
| LHX NYSE | Y | N | Y |
| S NYSE | Y | N | Y |
PAST PICKS: JULY 11, 2023
Marvell Technology (MRVL NASD)
• Then: US$62.15
• Now: US$67.24
• Return: 8%
• Total Return: 9%
Microsoft (MSFT NASD)
• Then: US$332.47
• Now: US$434.90
• Return: 31%
• Total Return: 32%
Meta Platforms (META NASD)
• Then: US$298.29
• Now: US$470.13
• Return: 58%
• Total Return: 58%
Total Return Average: 33%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| MRVL NASD | Y | Y | Y |
| MSFT NASD | Y | Y | Y |
| META NASD | Y | Y | Y |
