Part way through earnings
We are a good portion of the way through earnings season (about ¾ of the way). Everyone on the investment team either listens to management conference calls or reviews transcripts and commentary for the companies we follow and others around the globe. We noticed some interesting commentary from some of these companies and while it is anecdotal, we found some of them worthwhile and thought that we would reproduce them here:
The consumer seems really split. These next four comments point out some major differences:
“Spending remains healthy, supported by low unemployment and wage growth that continues to outpace inflation, this is true across both affluent as well as mass market consumers…” – Mastercard (MA) CEO Michael Miebach
“If I go to the U.S., a little bit more of a difficult situation there. There’s a lot of consumer anxiety. They look at a quite uncertain outlook as it relates to their personal finances, job expectations, inflation. So they tend to focus more on essential items.” – Mondelez International ($MDLZ ) CEO Dirk Van de Put
These quotes probably sum it up best: “The spirits industry… has come down drastically over the last couple of years.” – Brown-Forman (BF.B) CEO Lawson Whiting… “We continue to hold a strong order book entering 2027 without considering the new launched cars, and with all the range models currently in production substantially sold out. – Ferrari N.V. ($RACE ) CEO Benedetto Vigna
This following is very different than what we expected and is probably quite positive:
“While the import cliff that many anticipated did not prove to be a start, there was a general softness in freight demand for most of the quarter, especially on the West Coast.” – Knight-Swift Trans. ($KNX ) CEO Adam Miller
We have thought this for a long time, and it looks like it could become a potential theme going forward:
“We are at the beginning of an investment supercycle into more reliable baseload power, grid infrastructure and decarbonization solutions. Our near-term results are improving, but more importantly, our long-term potential is accelerating faster.” – GE Vernova ($GEV ) CEO Scott Strazik
“This means that” we do not see real deterioration in the economy at this point. We also notice that there is quite a divergence across the globe with continued weakness in China but developing strength in Europe. We must stick to our investment process and continue to focus on great quality companies.
National Instrument 31-103 requires registered firms to disclose information that a reasonable investor would expect to know, including any material conflicts with the firm or its representatives. Doug Johnson and/or Pathfinder Asset Management Limited are an insider of companies periodically mentioned in this report. Please visit www.paml.ca for full disclosures.
Changes in Leverage. We are increasing the asset ceiling to 2.0 times the market value of equity for Pathfinder International Fund and Pathfinder Conviction Fund to be consistent with Pathfinder Partners’ Fund and Pathfinder Resource Fund.
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*All returns are time weighted and net of investment management fees. Returns from the Pathfinder Partners’ Fund and Partners’ Real Return Plus Fund are presented based on the masters series of each fund. The Pathfinder Core: Equity Portfolio and The Pathfinder Core: High Income Portfolio are live accounts. These are actual accounts owned by the Pathfinder Chairman (Equity) and client (High Income) which contain no legacy positions, cash flows or other Pathfinder investment mandates or products. Monthly inception dates for each fund and portfolio are as follows: Pathfinder Core: Equity Portfolio (January 2011), Pathfinder Core: High Income Portfolio (October 2012) Partners’ Fund (April 2011), Partners’ Real Return Plus Fund (April, 2013), and Partners’ Core Plus Fund (November 2014).
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