Northstar quarterly market reports
The Northstar Market Report provides powerful empirical evidence as to why we are confident that our investment philosophy and process, closely followed, will deliver market beating returns for our clients over time. This work again points to controllable factors - markets move wildly, falling in and out of love with different sectors and companies, but we have a defined formula that works and we stick to our guns by only owning quality companies when they are incorrectly valued by other investors. We discuss stocks in this report, delving into our investment cases for specific securities which we own.
CURRENT QUARTERLY REPORT
2020 – Quarter 1
THE BIG PICTURE
Big is not better in asset management
The decision-making process around most product purchases usually involves four factors; brand or reputation, price, client service and performance. As consumers apply these factors, they often show weak persistency (loyalty), even for large ticket purchases such as vehicles – most own different brands during their lives and are remarkably disloyal.
FROM THE ANALYSTS
Local Fixed Income—The COVID-19 crisis and how we are responding
Before the COVID-19 outbreak, local fixed income assets appeared reasonably priced, taking into account the imminent and widely anticipated Moody’s credit rating downgrade to junk status. Since then the markets have sold-off sharply, as the COVID-19 has turned into a global pandemic. We analyse the price and valuation impacts on the different income assets and provide guidance as to the marginal changes we are making to the portfolios in response to this crisis.
FROM THE ANALYSTS
Danaher— Exceptional capital allocation with a focus on life sciences
Danaher’s exceptional ability to allocate capital has been the primary driver of sustained long term returns to shareholders. Through Danaher Business Systems (DBS) they have been able to continuously adapt and shift to the most attractive end markets with durable competitive advantages. DBS is a set of processes and tools that enable sustainable growth and profitability by creating a virtuous cycle of improvement. Over time this has culminated in a shift in focus from industrial businesses that are inherently cyclical to businesses in the life science segment that are characterised by higher growth, higher recurring revenues and higher margins.
STAFF MEMBER PROFILE
Staff member profile – Simphiwe Msibi (Analyst)
When did your interest in financial markets start?
The global financial crisis happened when I was in grade eight and it was a probably the most interesting thing I had ever seen. I was fascinated by how complex capital markets are and how macroeconomic events could be measured and quantified in real-time. This led to me studying a degree in Economics and Finance.
QUARTERLY REPORTS ARCHIVE
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