Dan Rohinton, portfolio manager, iA Global Asset Management
FOCUS: Canadian, global large caps
Top Picks: Linde, Mastercard, TRYG A/S
MARKET OUTLOOK:
As we delve deeper into the earnings season, we observe not all companies are faring equally. The disparity in performance confirms that strategic and operational fundamentals, and not just market conditions, play a crucial role in determining a company’s financial health.
High expectations surround the larger firms investing in artificial intelligence. We have seen some encouraging signs of growth and innovation, but a transformative “killer product” remains to be seen. Investors, thus, should keep a close watch on this sector while being cautious of the hype.
Lastly, we can’t overlook that market valuations, sitting at the high end currently exert an element of constraint on further upside potential. Nonetheless, we don’t see immediate triggers for alarm as the higher valuations do not yet seem to signal a bubble, but rather a more tempered state of growth.
To put it all together, navigating the upcoming market terrain requires a keen focus on individual company fundamentals, an understanding and caution for sectors heavily dealing in future potential like AI, and a mindful approach to relatively high current valuations. This balanced strategy should serve investors well in making informed decisions in the existing market landscape.
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TOP PICKS:
Linde PLC (LIN NASD)
Linde is a global leader in industrial gas with a disciplined capital allocation philosophy.
A defensive quality-focused way to participate in the industrial renaissance across the United States. Disclosures: Yes we own in the portfolios, No we don’t own personally, No we don’t do business
Mastercard (MA NYSE)
Mastercard is a global leader in the payment network duopoly with peer Visa, a long-term beneficiary of the cash-to-card and digitization of payments secular trend. A continued recovery in the level of cross-border volumes and deepening penetration of value-added services adds duration to Mastercard’s already long runway.
TRYG A/S (TRYG CPH) – Copenhagen Exchange
It is a leading Nordic insurer with a dominant market share across its key geographies in Denmark, Sweden and Norway. Innovative partnership model with TRYG foundation that enables its clients to participate in the strong profitability of the company by giving them a “rebate.” This drives loyalty and cross-sell while also fully benefitting public shareholders. Temporary issues around profitability from frequency and severity claims are normalizing and I expect this to continue.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| LIN NASD | Y | N | N |
| MA NYSE | Y | N | N |
| TRYG CPH | Y | N | N |
