Quotes
We are a good portion of the way through earnings season. Everyone on the investment team either listens to management conference calls or reviews transcripts and commentary for the companies we own. We also follow general news for firms that we do not own, as it helps us identify different trends or issues that we do not see in our portfolio companies. We noticed some interesting commentary from some of these companies. While it is anecdotal, we found some of them worthwhile and thought that we would reproduce them here for you:
- “In North America, consumer confidence has improved slightly following the U.S. election, despite continuing concern about the economic outlook.” — Mondelez Int’. ($MDLZ ) CEO Dirk Van De Put
- “I think the overall consumer environment is pretty stable in the sense that there’s good economic growth on a broad-based view around the world, and that includes both the developed and the emerging markets.” – Coca-Cola ($KO ) CEO James Quincey
- “Soft market conditions persist in China, making further progress difficult. Anti-Western sentiment in the Middle East continues, and we’ve seen slowing market consumption in the Asia, Middle East, Africa region, including India.” – Procter & Gamble ($PG ) CFO Andre Schulten
- “U.S. customers remain resilient… We’re seeing higher engagement across income cohorts, with upper-income households continuing to account for the majority of share gains… Our focus on bringing down pricing continues despite pockets of food inflation in areas like eggs, bacon, and ground beef. Like-for-like pricing in general merchandise and consumables was deflationary, while food remained inflationary in the low single digits.” – Walmart ($WMT ) CFO John Rainey
- “The overall market is pretty muted. And a big — that sort of, I think, more mix can still add that low-income consumer. So if you look at the low-income consumer in the U.S., and I’m talking industry numbers right now, but that low-income consumer in the U.S., in Q4, was still down double digits. And as you know, that low-income consumer is overweighted in the industry relative to the U.S. in total. I think about middle and higher income, a very robust consumer in those areas.” – McDonald’s ($MCD) CEO Christopher Kempczinski
“This means that” it looks to us that the consumer and economy remain strong despite the concern from tariffs and other geopolitical risk. This can change quickly. We will keep watching this closely as earnings season evolves.
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
*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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