07.01.2020
The Lead - "The Importance of Balance Sheets"
- The current economic environment highlights the value of cash to businesses with 306 equity issuances totaling $99 billion in the U.S. this quarter, according to Bloomberg.
- One area where our investment pillars blend to the potential benefit of our clients is when strong balance sheets and valuation can combine to create opportunity, and we can adjust our assessment of valuations accordingly.
- Cash-rich companies in the S&P 500® are unique, with only 16% that have more cash than debt on their balance sheets and Sterling equity strategies own the majority of the top 5 in the index ranked in terms of total net cash.
06.10.2020
The Lead - "Looking for More Internationally"
- The case for international equity outperformance based on valuation alone has been a challenging one.
- If an investor overlays relative earnings growth with valuation, the combination has the potential to increase the probability of success.
- The Equity Opportunities Group defines a “good bargain” as one that has the combination of growth and value in favored themes worldwide.
05.05.2020
The Lead - "Can Culture Generate Performance?"
- As active managers, part of our investment process can involve interviewing management teams to determine if their corporate culture enables them to adapt to challenging periods, such as early 2020.
- We provide an example from a recent management discussion in April.
- Glassdoor provides a tool to measure corporate cultures and academic studies, such as those by Norwich Business School, indicating companies that score well in terms of compensation, senior management, corporate values and work/life balance have the potential to outperform peers.
