At the stock level, significant performance differentials in the quarter included:
The dominant provider of the chips employed in accelerated compute continued to add value as investors better appreciate the magnitude of the build associated with AI.
A leading pharmaceutical holding appreciated as the health benefits associated with GLP-1’s (weight loss drugs) were delineated in “follow on” clinical trials.
A position in a large manufacturer of commercial jetliners declined after manufacturing flaws were reported. This position was eliminated.
Two athletic footwear/apparel marketers detracted as near-term results disappointed relative to consensus expectations.
Looking forward, we expect interest rates to remain within their recent trading range. The Federal Reserve has signaled Fed Fund rate cuts are coming this year, but we see much of that already built into the valuation of longer dated bonds. Macro-economic projections over the last year or so have gone from recession to “soft landing” to “no landing.” Our take for the economy this year can be best described as “steady as she goes.” A few market segments (housing and automobiles) appear to be discounting an early cycle type of demand rebound. While still unclear if interest rates will fall sufficiently to move the dial, our research efforts are currently evaluating this type of play.
Our portfolio construction remains focused on individual stocks. Many of our holdings provide significant participation in major waves of innovation occurring in the technology and health care fields. Several positions, namely semiconductors, recently demonstrated near
parabolic price appreciation. Having managed through more than one semi cycle (and having the scars to prove it), we recall this group’s inherent volatility and have trimmed select positions.
Stocks’ robust performance so far this year comes despite nearly a half of a percentage point increase in 10 Year Treasury yields. We attribute the divergence to a stronger economy leading to better corporate profit expectations. This makes the upcoming earnings reporting season all the more important.
In the meantime, spring flowers are beginning to bloom and baseball is already being played.
Enjoy,
Craig B. Steinberg Matt Ward Bob Ruland
Although the statements of fact and data in this report have been obtained from, and are based upon, sources that the Firm believes to be reliable, such as Bloomberg, FactSet and the Bureau of Economic Analysis as of March 31, 2024, we do not guarantee their accuracy, and any such information may be incomplete or condensed. All opinions included in this report constitute the Firm’s judgment as of the date of this report and are subject to change without notice. This report is not intended as an offer or solicitation with respect to the purchase or sale of any security. This information is intended for informational purposes only. Actual portfolios may vary. Investing in securities carries a risk of loss. There is no assurance that the investment objectives will be achieved or that the strategies employed will be achieved or that the strategies employed will be successful. Past performance is no guarantee of future results. This presentation may contain forward looking statements or projections relating to future events or future performance. Such statements and projections are subject to a variety of risks, uncertainties and other factors, such as economic, political, and public health, that could cause actual events or results to differ materially from those anticipated in this presentation.
At the stock level, significant performance differentials in the quarter included:
The dominant provider of the chips employed in accelerated compute continued to add value as investors better appreciate the magnitude of the build associated with AI.
A leading pharmaceutical holding appreciated as the health benefits associated with GLP-1’s (weight loss drugs) were delineated in “follow on” clinical trials.
A position in a large manufacturer of commercial jetliners declined after manufacturing flaws were reported. This position was eliminated.
Two athletic footwear/apparel marketers detracted as near-term results disappointed relative to consensus expectations.
Looking forward, we expect interest rates to remain within their recent trading range. The Federal Reserve has signaled Fed Fund rate cuts are coming this year, but we see much of that already built into the valuation of longer dated bonds. Macro-economic projections over the last year or so have gone from recession to “soft landing” to “no landing.” Our take for the economy this year can be best described as “steady as she goes.” A few market segments (housing and automobiles) appear to be discounting an early cycle type of demand rebound. While still unclear if interest rates will fall sufficiently to move the dial, our research efforts are currently evaluating this type of play.
Our portfolio construction remains focused on individual stocks. Many of our holdings provide significant participation in major waves of innovation occurring in the technology and health care fields. Several positions, namely semiconductors, recently demonstrated near
parabolic price appreciation. Having managed through more than one semi cycle (and having the scars to prove it), we recall this group’s inherent volatility and have trimmed select positions.
Stocks’ robust performance so far this year comes despite nearly a half of a percentage point increase in 10 Year Treasury yields. We attribute the divergence to a stronger economy leading to better corporate profit expectations. This makes the upcoming earnings reporting season all the more important.
In the meantime, spring flowers are beginning to bloom and baseball is already being played.
Enjoy,
Craig B. Steinberg Matt Ward Bob Ruland
Although the statements of fact and data in this report have been obtained from, and are based upon, sources that the Firm believes to be reliable, such as Bloomberg, FactSet and the Bureau of Economic Analysis as of March 31, 2024, we do not guarantee their accuracy, and any such information may be incomplete or condensed. All opinions included in this report constitute the Firm’s judgment as of the date of this report and are subject to change without notice. This report is not intended as an offer or solicitation with respect to the purchase or sale of any security. This information is intended for informational purposes only. Actual portfolios may vary. Investing in securities carries a risk of loss. There is no assurance that the investment objectives will be achieved or that the strategies employed will be achieved or that the strategies employed will be successful. Past performance is no guarantee of future results. This presentation may contain forward looking statements or projections relating to future events or future performance. Such statements and projections are subject to a variety of risks, uncertainties and other factors, such as economic, political, and public health, that could cause actual events or results to differ materially from those anticipated in this presentation.