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.

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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.

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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.

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Answer: Diversify Away from It.

This is the first in a monthly 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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• 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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• 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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• 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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• Global airline travel continues to grow, leading to strong demand for new aircraft. Following excellent share price gains for rival Boeing, we think Airbus is best positioned to provide strong capital appreciation.

This is the sixth 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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With additional scrutiny in the sector since we published our original piece ‘Market Research #002 – Why we like the Technology Sector’, we decided to revisit our assumptions and determine which companies are more, or less, attractive.

This is the fifth 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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There are numerous ways to gain exposure to the healthcare sector from direct product producers (medical supply or drug companies), health insurers and pharmacies. There are also indirect ways such as real estate firms focused on health care or retirement facilities. Each sub-sector offers its own unique risks and opportunities. In this piece, we look at the medical products field and why we think it provides interesting opportunities.

This is the forth 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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Evaluating high growth companies is challenging, given that traditional methods often yield astronomical valuations for companies generating negative cash flow, but the rewards can be quite compelling. Any slowdown in growth rates or corporate missteps can cause swift losses in investment value. Thus, it is imperative to look beyond just current financials and evaluate the long-term potential of a company and the ability of management to execute on its growth potential.

In this article, The Murray Wealth Group looks at the financials data of three companies without naming the actual companies right away.

This is the third 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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Some investors and commentators are skeptical of these technology investments, arguing that valuation levels are too high and that excessive speculation means they should be avoided. We do not agree!

This is the second in a monthly 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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