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Did you miss us on BNN?!

If you missed the live shows of Bruce and Jamie on BNN Market Call, don’t sweat it! We have them posted here for you to watch now!

 

Recent MWG Appearances on BNN

Jamie Murray, Portfolio Manager and Head of Research at The Murray Wealth Group, takes viewer questions on North American equities on BNN Market Call (August 9th 2019).

Watch him discuss company outlooks such as Microsoft, Stelco and more!

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Bruce Murray, Portfolio Manager, CEO & CIO at The Murray Wealth Group, takes viewer questions on North American equities on BNN Market Call (July 30th 2019).

Watch him discuss company outlooks such as Facebook, Enbridge, Caribbean Cruise Lines and more!

Watch Video

Recession Watch 2019

What are indicators saying?


Recessions are almost impossible to predict. Consider these three headlines:

“US could go into recession this year: Expert”

“There’s more than 60% chance of a global recession within the next 18 months, economist says”

“The bond market’s recession signal may be wrong this time”

The year from each respective headline – In order: April 2015, April 2017 and July 2018. Read

JULY PORTFOLIO REVIEW

Powell delivered the rate cut the market wanted on July 30. The first decrease in interest rates since 2012. The question was (is) whether this would be a ‘one and done’ scenario or if additional cuts should be expected before 2020. Fed Chairman Powell was non-committal indicating the rate cut was “a mid-cycle adjustment to policy,” and not “the beginning of a lengthy cutting cycle.” While the market negatively reacted to Powell’s commentary, ultimately the rate cut helped the market rally through June and July.

Attention quickly turned from Fed-watching to trade wars when President Trump tweeted a new round of tariffs on US$300B of Chinese goods. Trump and Powell have publicly clashed on the pace of rate cuts and it’s speculated that Trump is using trade and tariffs to stall the economy and build the case for additional rate cuts. Trump would then be in position to make a trade deal with China in 2020 and spark the economy into the next election.

Overall, the U.S. earnings season should be viewed positively with a focus on technology bellwethers beating on revenue and reducing capex (hello, MSFT, GOOG, IBM, FB, AAPL) all while the outlook for cloud-based computing remains strong. We highlight a news release from LinkedIn, indicating its intention to move from its in-house servers to the Azure public cloud Infrastructure (not shocking as LinkedIn and Azure are both Microsoft companies). The real nugget is that the migration will be multi-year initiative, again indicating the long runway for cloud growth. LinkedIn is a relatively simple company with website and user data as well as its apps for various platforms. That it will take three-plus years to fully migrate highlights the complexity as well as the opportunity. Consider AT&T’s cloud deal announced with Microsoft – the largest ever (upwards of US$2B of revenue although timeframe and other relevant was not provided). AT&T (recently integrated US$85B Time Warner merger) would have dozens of legacy data systems to migrate over time as well as new use cases such as its apps for its soon to launch streaming platform. Best of all, cloud computing has so far eschewed any scrutiny from U.S. antitrust watchdogs even though four companies (MSFT, AMZN, GOOG, IBM) are poised to control much of the server infrastructure housing U.S. corporate, government and citizen data (our crystal ball thinks this will be an issue at some point).

TSX-listed companies will report en masse in the first two weeks of August providing additional information into the domestic economy. The TSX continues to suffer from a lack of institutional dollar flow as capital flees Canada. In July, the market increased a meagre 0.1%. The market remains concerned about elevated housing risks and negative energy sentiment. We are not immune to these effects with holdings in commodity producers Stelco, Cameco and Enbridge (pipelines) as well as an 80% weighting to Canada in our Income Fund. However, the banking sector remains healthy and there are a number of global champions headquartered in Canada that present opportunities. Read

Trade War Times: Where to Invest

The current trade war between China and the United States represents both a headwind for global economic growth and an overhang in the equity markets. A myriad of factors has driven the U.S. and China to this point, but there are two main issues that the U.S. Government is targeting: its large trade deficit with China, as well as concerns surrounding the transfer of intellectual property, state secrets and technology through espionage. Read

Midsummer Musings

This is the fourteenth in a series of independent research produced by the Murray Wealth Group Research Team. The purpose of this series is to provide insight into our portfolio construction and how our research shapes our investment decisions. We welcome any feedback or questions you may have on these monthly commentaries.

This piece is written by our CEO and CIO, Bruce Murray.


Midsummer Musings


While the American stock markets have recently broken through to all-time highs, we continue to see prognosticators fighting for seats atop the ‘Wall of Worry’.

“This is the longest economic expansion in history.”

“We are at full employment; therefore, inflation must be just around the corner.”

“The tariff wars have killed trade.”

On the other hand, Larry Fink of Blackstone believes that the U.S. public is underrepresented in equities despite the solid liquidity of the U.S. consumer.

  Read

Market Research #13: Antitrust

Antitrust Coming to Big Tech


This is the thirteenth in a series of independent research produced by the Murray Wealth Group Research Team. The purpose of this series is to provide insight into our portfolio construction and how our research shapes our investment decisions. We welcome any feedback or questions you may have on these monthly commentaries.

This piece is written by our Head of Research, Jamie Murray.


On May 31, The Wall Street Journal broke the news of the opening of an investigation into four of the most prominent technology companies: Alphabet, Amazon, Apple, and Facebook. The action is bi-partisan supported and thus ‘big tech’ won’t be able to lean on its friends in Washington for sanctuary. We own positions in all four companies in our Global Growth Portfolio as we are attracted to the technology sector’s appealing fundamentals (secular growth, strong margins, low capex/high cash flow). As owners, we are keenly interested in gauging the likely outcome of each company’s investigation and determining the risks and opportunities available.

Read

Market Research #12: Aritzia

Aritzia: wide open space for U.S. growth


This is the Twelfth in a series of independent research produced by the Murray Wealth Group Research Team. The purpose of this series is to provide insight into our portfolio construction and how our research shapes our investment decisions. We welcome any feedback or questions you may have on these monthly commentaries.


Aritzia is a Canadian women’s fashion retailer positioned at the upper end of the mass consumer market. The company has a strong footprint in Canada with 67 locations, and a growing presence in the United States with 25 stores located in both shopping centers and other urban shopping destinations. Aritzia designs and sells exclusive inhouse brands, including TNA, Wilfred, and Babaton, and carries select products of leading designers such as Adidas. The company enjoys high satisfaction amongst the coveted 20-40 year-old women’s demographic. It is positioned above larger fashion retailers like H&M and The Gap but well below European luxury designers in terms of price, brand perception and quality. We believe Aritzia is a best-in-class fashion retailer, with a long runway of growth in the United States, trading at a reasonable valuation.

Read

Market Research #011: Cruising Industry

Cruising to Strong Returns with Royal Caribbean


This is the Eleventh in a series of Independent research produced by the Murray Wealth Group Research Team. The purpose of this series is to provide insight into our portfolio construction and how our research shapes our investment decisions. We welcome any feedback or questions you may have on these monthly commentaries.


The cruise industry presents an attractive opportunity for investors. With the perception of cruising having changed over the last date, the industry has been expanding into both new geographic and demographic markets globally. China represents a strong new growth market as its middle class emerges, and new onboard features/entertainment options are appealing to millennials and families as alternatives to destination resort vacations. As well, cruise lines are now able to better maximize capacity utilization as the ships can be relocated to high demand markets based on seasonality.

The industry is dominated by three major players (Royal Caribbean, Carnival, and Norwegian) that combined make up 75% of the market (based on available capacity), with smaller, niche operators limited to certain markets or demographics. Barriers to entry are relatively high, with sales distribution, significant capital requirements, quality/reputation and port/berth access representing the main barriers to new competition. The last major company to successfully enter the cruise market was Disney, in the 1980s (although it remains a niche player with 2.2% share and Disney-themed ships), and it was only able to do so by leveraging its established brand as well as holiday distribution and marketing.

Read

Market Research #010: Global Automotive Sector

Evaluating Investment Opportunities in the Global Automotive Sector


This is the Tenth in a series of Independent research produced by the Murray Wealth Group Research Team. The purpose of this series is to provide insight into our portfolio construction and how our research shapes our investment decisions. We welcome any feedback or questions you may have on these monthly commentaries.


The Global Automotive sector is a complex web of original equipment manufacturers (OEMS for short; Ford, Nissan, Tesla), suppliers and of course, customers, mostly retail, but also including trucking companies, rental car services and other commercial vehicle applications. Tangled into the physical asset chain is the financial aspect of lease/financing transactions, which have their own set of complexities.

The sector has seen major disruption throughout its history, starting with the introduction of assembly line manufacturing a century ago…..to the rise of Japan, Korea and now China in automotive production…..to an ever-increasing use of computing/technology. This report will outline where we stand in the auto cycle and how new disruptors will affect the investment landscape and opportunities, we see for good investment returns.

Read

Market Research #009 – Facebook: controversy in rear-view, growth resumes

    • It is common for high growth companies to have flaws exposed in their business models as their products or services become more mainstream, attracting critics and detractors. We detail examples of two other high growth companies that faced similar controversy.

This is the ninth in a series of independent research produced by the Murray Wealth Group Research Team. The purpose of this series is to provide insight into our portfolio construction and how our research shapes our investment decisions.

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Market Research #008 – 2019 Outlook

    • For our monthly research note, we are presenting our 2019 investment outlook.

This is the eighth in a series of independent research produced by the Murray Wealth Group Research Team. The purpose of this series is to provide insight into our portfolio construction and how our research shapes our investment decisions.

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Market Research #007 – Netflix: Large Market Provides Room to Grow

    • One of our key considerations when investing in a company is that it represents an enduring growth opportunity. We believe markets generally underestimate the length of time that a company can sustain a high level of growth.

This is the seventh in a series of independent research produced by the Murray Wealth Group Research Team. The purpose of this series is to provide insight into our portfolio construction and how our research shapes our investment decisions.

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