Kim Bolton, president and portfolio manager of Black Swan Dexteritas FOCUS: technology stocks
Top Picks: Okta, SAP, Fortinet
MARKET OUTLOOK:
In December, global financial markets posted a mixed performance to conclude 2024 as investors adjusted their positions in anticipation of policy shifts under the incoming Donald Trump administration.
While global equity markets experienced declines, led by the small-cap and the energy sectors, the Nasdaq posted a modest gain for the month. Regional equity indices showed a varied performance, with France and India leading regional gains. Interest rates rose as investors reduced expectations for rate cuts in 2025, driven by ongoing inflationary pressures.
Your BSD Global Tech Hedge Fund finished 2024 with very respectable returns and a performance that is in the top quartile of hedge fund managers. January 2025 started with a continued deterioration in global stock markets, but in the second half of January the stock market’s brief downturn appears to be ending, driven by better-than-expected inflation data, solid economic growth and a business-friendly Trump administration. With big tech leading the way, corporate profits are forecast to enjoy double-digit growth through 2027, bolstered by record buybacks and improving profit margins.
On Monday, stock markets edged down as investors assessed the release of DeepSeek R1, a large language model developed by a Chinese research group, raising concerns about the future of capital spending in artificial intelligence. Your BSD team believes this is a golden buying opportunity in the technology arena.
While the market searches for the next fundamental catalyst or technical signal, your BSD team will continue to trim those securities that are achieving their respective intrinsic values, and buy those technology growth 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 “dialed down” in bullish markets.
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TOP PICKS:
Okta (OKTA NASD)
PT - 104.50 Market Cap - B$15.23 Price - $88.86
Okta Inc., founded in 2009 by Todd McKinnon and Frederic Kerrest, is a leading identity and access management company based in San Francisco. The company provides cloud-based software solutions that help organizations manage and secure user authentication into applications, and enable developers to build identity controls into applications, websites, web services, and devices.
SAP SE (SAP NYSE)
PT - $330.48 Market Cap - B$336.60 Price - $276.29
SAP operates as an enterprise application software company worldwide. We believe SAP has a diversified cloud portfolio that is likely to show resilience during a macro downturn given its product breadth and ability to drive efficiencies for its customers.
Fortinet (FTNT NASD)
PT - $116.16 Market Cap - B$74.27 Price - $96.90
Fortinet provides broad, integrated, and automated cybersecurity solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers FortiGate hardware and software licenses that provide various security and networking functions, including firewall, intrusion prevention, anti-malware, virtual private network, application control, web filtering, anti-spam, and wide area network acceleration.
The company remains focused on addressing the convergence of networking and security, going to market with a platform approach, and differentiating with technological leadership. FTNT continues to take share in core platform markets, and has grown to account for approximately 38 per cent of firewall shipment market share.
DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
---|---|---|---|
OKTA | Y | Y | Y |
SASP | Y | Y | Y |
FTNT | Y | Y | Y |
PAST PICKS: January 24, 2024
Dassault Systèmes SE (DASTY OTCMKTS)
- Then: US$51.63
- Now: US$39.56
- Return: -23%
- Total Return: -23%
NVIDIA (NVDA NASD) – stock split June 10, 2024
- Then: US$613.62
- Now: US$122.85
- Return: 100%
- Total Return: 100%
Adobe (ADBE NASD)
- Then: US$606.48
- Now: US$440.34
- Return: -27%
- Total Return: -27%
Total Return Average: 17%
DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
---|---|---|---|
DASTY | N | N | N |
NVDA | Y | Y | Y |
ADBE | N | N | N |