5 min read | by Alice Popescu | I recently returned from my first post-pandemic due diligence trip to Mexico. While virtual meeting platforms proved to be a blessing during travel lockdowns, nothing compares to the insights gained and relationships that can be developed during a quality research trip. Travelling across three major economic zones and two time zones, I visited with 15 companies, public and private, as well as a vast array of policymakers and political observers. Broadly speaking, the infrastructure improvements, economic environment, services industry recovery, and opportunities linked to an overarching trend of “nearshoring” were impressive.
1 min read | Stock-based compensation (SBC) in the technology sector has proliferated in recent years, driven by the war for talent and a period marked by low cost of capital, plentiful access to capital, and rising valuations. The challenge comes when decade-long market tailwinds begin to change direction. The virtuous cycle of aggressive stock issuance to employees, elevated ‘adjusted’ earnings, rising stock prices, and strong employee engagement can become vicious when it unwinds.
2 min read | In thisarticle [click to read], we present a series of three snail charts that illustrate the evolution of corporate earnings growth estimates from 2016 through the 2023 forecast season in the US, Europe, and Japan - and discuss why we believe the data represents dangerous trend extrapolation. We expect the outlook for many companies’ earnings to come under pressure as the year progresses owing to slowing revenue growth, increasing cost pressures, and lofty embedded expectations.
4 min read | This morning the FT published an article [click to read] regarding the broadening out of market leadership and the protection that value stocks have provided for investors during the tumultuous start to 2022. These topics resonate here at Altrinsic and have been key themes in our market commentaries over the past several years. Beyond the narrative, the FT's simple charts also tell a compelling story.
The Altrinsic Emerging Markets Opportunities portfolio finished the quarter virtually unchanged (+0.1%), outperforming the MSCI Emerging Market Index’s decline of 7.0%, as measured in US dollars. Key contributors to our relative outperformance included our differentiated exposure to energy, financials, and communications services companies, our overweight exposure in key Latin American markets including Brazil, Chile, Mexico, and South Africa, and our significant underweight exposure in Russia and China.
3 min read | At Altrinsic Global Advisors, our emerging markets equity strategy is managed with a bottom-up, fundamentals-driven approach and an objective to identify high quality, underappreciated investment opportunities across the cap spectrum, truly reflecting the DNA of the EM asset class. Today, as we assess how our differentiated perspectives and exposures played out during the first year of our strategy, we find great alignment with our previous views (which we outlined in the September 2021 white paper report entitled Exploring the True DNA of Emerging Markets).
The Altrinsic Global Equity portfolio declined 0.1% during the first quarter, outperforming the MSCI World Index’s 5.2% decline, as measured in US dollars. Just as most nations began lifting COVID-related restrictions and returning to normal, tensions intensified amidst surging inflationary pressures, tightening policy measures in the US, lockdowns in China, and Russia's invasion of Ukraine.
The Altrinsic International Equity portfolio declined 1.5% during the first quarter, outperforming the MSCI EAFE Index’s 5.9% decline, as measured in US dollars. Just as most nations began lifting COVID-related restrictions and returning to normal, tensions intensified amidst surging inflationary pressures, tightening policy measures in the US, lockdowns in China, and Russia's invasion of Ukraine.
2 min read | After a decade of largely running in parallel, credit and equity markets have begun to diverge in 2022. Check out our article [click to read] for some supporting data and thoughts about why equity investors should be paying close attention to credit market dynamics.
3 min read | Hypersonic weaponry is one of the most disruptive technologies in modern defense. We recognize that this is a controversial, sensitive, and potentially polarizing topic for multiple reasons, especially given the ongoing war in Ukraine. Yet, given the significant resources governments are committing to hypersonic research and innovation, we felt it would be valuable to provide a brief, fact-based review of hypersonic technology, its history, and the potential implications from both geopolitical and industry standpoints. Our sole intent is to provide an educational overview.
