I have recently returned from two weeks in the United States meeting with companies in the lead up to the listing of WAM Global. The trip confirmed our observations that the US economy is firing and many companies are benefitting from a number of tailwinds.
The US is effectively going through a ‘goldilocks’ period – with the combination of sustained growth and low inflation reflecting the healthy ‘not too hot or cold’ economy.
Although the Tweet-driven US President has created a certain level of volatility in geopolitics and financial markets, the White House tax cuts and changes to rules around repatriation of company’s offshore cash have further stimulated the economy. This has resulted in higher wages or one-time bonuses for employees, greater capital investments by corporates and increases in buybacks and dividends for investors.
With strong economic tailwinds for corporate earnings and mispricing opportunities arising from volatility associated with fears around the pace of interest rate increases, as an active fund manager picking individual stocks, this presents an exciting period.
During the US, we identified a number of companies that we believe will experience long runs of growth, including Sensata Technologies, which manufacture sensors for automotive, heavy vehicle and other industrial applications. Presenting at the Future Generation Investment Forum in Sydney on 15 May, I outlined why Sensata is currently on our radar for WAM Global.