Latest News

07.12.2021

Sterling Capital Senior Portfolio Manager George Shipp, CFA® to Retire in January 2022

Sterling Capital announces the retirement of Managing Director George F. Shipp, CFA®, who heads the Virginia Beach-based Equity Opportunities Group.

07.06.2021

The Lead - “Quality on the Move”

• As the second quarter comes to a close, we have witnessed a gradual improvement in the relative performance of quality stocks, but how does one define quality?
• We seek to define quality through a quantitative lens, but also by employing our assessment of fundamental characteristics of quality. 
• With BofA stating this month that quality stocks represent the “best entry point in over a decade,”  and relative valuations attractive, fundamental investing in quality equities appears timely.

06.07.2021

The Lead - "Benefits of Staying Invested"

• The performance of equity markets over the past twelve months is impressive – for investors who remained invested.
• Strategas Research's work shows that if an investor engages in “marketing timing” and misses out on just a few of the best-performing days in “the market,” it can have a pronounced impact on their long-term return profile.
• Is there further upside in equity markets in 2021? We prefer not to make market predictions, however, Strategas Research provides ample examples of bull markets with greater duration than the one that began in 2020.

05.07.2021

The Lead - "Dividend Growth and Rising Rates"

• With the robust economic recovery underway and the potential for further interest rate increases, we wanted to examine how dividend growth stocks fared in previous periods of rising interest rate environments.
• According to Ned Davis Research, dividend growers outpaced the return of “the market” as well as other dividend philosophies during periods of rising interest rates.
• We discuss the foundational benefits of dividend growth investing and its potential to perform well in a rising rate environment.
• Using Pepsi shares, we provide a case study on the power of dividend growth investing.

04.05.2021

The Lead - “Time for Quality to Shine?”

• This past month, Bank of America’s U.S. Equity and Quant Strategy team stated the “long term alpha opportunity has increased to multi-decade highs” for quality investing.
• According to their research, quality investing works best when the stock market focuses on fundamentals, such as earnings growth, earnings estimate revisions, and valuation.
• Investors appear more focused on short-term information than long-term information, according to a search of this past quarter’s earnings call transcripts for S&P 500 companies.
• We believe that taking advantage of this apparent discord between investor interest and the strengths of fundamental investing in quality stocks may offer an advantage as we seek to add value for clients.

03.10.2021

The Lead - "Beta in Focus"

• Cornerstone Macro highlights the remarkable start for high-beta stocks in 2021.
• Stocks with high-beta characteristics tend to perform well when economic data reaccelerates.
• We highlight additional research that shows how high-quality stocks may offer attractive valuations on a relative basis.

02.04.2021

The Lead - "Defensive Investing – 20 Years Later"

• The dynamics of market participants paying rich valuations for fashionable stocks are evident in 2021, just as they were when Benjamin Graham wrote his book on value investing in 1949 and in one of our first investor communications titled “Defensive Investing” from 2001.
• Bloomberg noted this month that trillions of dollars are pouring into market capitalization-weighted index funds, and that, as a team of researchers from Michigan State, the London School of Economics, and California-Irvine noted, fund flows over the past 20 years may have disproportionately increased the price of the largest stocks in the market relative to smaller-cap companies.
• We would note that these disparities appear to be impacting relative valuations as, per month end, the top ten companies (ranked by weight) in the S&P 500 Index were trading at 29x their forward earnings estimate, while the other 490 companies were trading at over a 30% discount.
• Just as when we started 20 years ago, we remain committed to the same investment approach that served us well over that timeframe, as we seek to take advantage of these opportunities to source promising investments for our clients.

01.07.2021

The Lead - "Value in Perspective"

• We look beneath overall market performance to highlight potential opportunities pertaining to disparities between growth and value as well as large caps and small caps, amidst some historic anomalies.
• While the outperformance of growth stocks relative to value stocks over the past 14 years is among the longest in terms of style cycles, the performance difference between large growth and small value is even more pronounced.
• We highlight the concentration of the S&P 500^® Index and institutional investors in a relatively small number of stocks.
• With relatively low portfolio turnover in our fundamental equity strategies, and by owning stocks that differ from the benchmark, we adhere to processes that Empirical Research Partners suggests may enable investment managers to generate outperformance over time.

12.03.2020

The Lead - "The Health of Healthcare Stocks"

• The S&P 500^® Index was up 14% at the end of November, but healthcare was one sector that did not fully participate.
• However, we would note that in many instances, underperformance ahead of presidential elections tends to be followed by outperformance, as healthcare was among the most consistent outperformers of any S&P 500 sector (75% of the time) after a presidential election, per Ned Davis Research.
• Several of our equity strategies have added healthcare positions in 2020 in anticipation of brighter days ahead.

11.09.2020

The Lead - "Improving Access to Global Opportunities"

• According to the World Bank, in the year 2000 the U.S. represented 30.5% of World GDP. 
• That share declined to 24.4% even though GDP in the U.S. doubled over that time period, according to Bloomberg.
• How do investors gain simple and cost-effective access to stocks in these foreign markets as they grow in prominence?
• We discuss how the growth in bank-sponsored American depositary receipts, or ADRs, are availing investors to these potential opportunities.

10.01.2020

The Lead - "Dividend Growth in Demand"

• Over the last twelve months, investors tended to favor those companies in the S&P 500^® that increased dividends at the fastest rate.

• One dynamic that may come into play is the scarcity of dividend growth in domestic markets that we highlight this month.

• One of the hallmarks of the Sterling Capital Equity Income strategy is targeting a dividend growth rate in excess of the overall market (in addition to its overall yield above the S&P 500).