Articles

Bloomberg Interview with Nick Griffin

Munro Partners’ Chief Investment Officer, Nick Griffin, was interviewed on Bloomberg Daybreak: Australia this morning, Tuesday 8 January 2019.

The 4.35 minute video covers U.S. technology stocks, in particular Amazon. The interview was with Haidi Stroud-Watts and Shery Ahn and is available here.

Highlights include:

Picks for 2019  – Amazon and Netflix

  • Stocks had a significant valuation adjustment in the second half of last year, which was not surprising, but the structural trends [cloud computing, e-commerce, OTT (over the top) TV, digital advertising] have not changed. Munro believes earnings growth drives value, and Amazon and Netflix are still at the start of their runway.
  • Structural trends that drive these stock earnings are still at play regardless of the cross-currents that we’ve seen in the last six months, and Munro anticipate for these stocks to come through.

FAANGS is just an acronym; these are all different companies

  • Munro likes Apple, but sold it nearly two years ago, as it anticipated growth to slow sooner. Slowing in China is a convenient excuse, but ultimately Apple is a hardware company, and most people already have the hardware. Innovation of the iPhone has slowed, and therefore it’s not surprising growth is slowing.

Valuations at 14.5x earning for S&P 500, do you buy the dip?

  • Valuation adjustments are just that and they take time. We’ve had a quarter of it, and it may take another quarter.
  • That said, Munro looks at growth equities, and they look for structural earnings growth, generally regardless of the cycle.
  • Earnings estimates need to come down, and although multiples are lower in the U.S., the S&P 500 is the most expensive market in the world today
  • The only way for multiples to go up is if something big happens for investors to look through earnings downgrades, this could either be from the Fed or a resolution in the U.S.-China trade disputes.

Disclaimer: The information contained in this presentation is general in nature and should not be relied upon. Before making any investment or planning decisions, you should consult a licensed professional who can advise you whether your decision is appropriate for you. Grant Samuel Fund Services Limited (ABN 48 129 256 104 AFSL 321517) is the product issuer of the Munro Global Growth Fund (ARSN 612 854 547), which is available at www.munropartners.com.au/access/. Munro Partners is the investment manager. The information contained herein is for general information purposes only and does not constitute financial product advice. This article contains information about securities, opinions and forecasts, all of which may change without notice and none of which has been prepared taking into account your objectives, financial situation or needs. Past performance is not a reliable indicator of future performance. You should consider your individual circumstances before making a decision about any of the information discussed in this article and Munro disclaims all liability to any person relying on the information contained in this communication. You should consider the product disclosure statement before making a decision to acquire or continue to hold an interest in the Munro Global Growth Fund.

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