Abbott Laboratories aims to keep hearts healthy and to nourish bodies at every stage of life by giving their customers information and medicines to manage our health. They create breakthrough products – in diagnostics, medical devices, nutrition and branded generic pharmaceuticals.
Adidas is the largest manufacturer of sportswear and sporting equipment in Europe and the second largest globally with 12% market share. Adidas is a global brand and well-managed company with good underlying growth. They have started to take market shares in the lucrative US market, and we see many years of strong growth ahead.
Alibaba operates China’s largest online ecommerce marketplace, matching over 300 million buyers to 8.5 million sellers with more than one billion product listings. Alibaba has market share of over 70% in China and exceptional growth prospects given the rapid growth in ecommerce in China. Alibaba also has a 37.5% interest in AliPay, China’s PayPal equivalent.
Alphabet is the holding company which owns the world's leading internet search provider, Google. Google is the world's most visited website and the largest global advertising platform by advertising revenue. As well as owning the Google search engine Alphabet owns video platform YouTube and is leading the development of autonomous vehicles through its Waymo subsidiary.
Amazon.com is a global leader in both online retail and in the provision of public cloud computing services. The company has wide moats around both of the core business lines driven by scale, innovation and compelling customer propositions. The company is also at the forefront of innovation not only in retail and computing but also logistics, marketplaces and robotics.
Descartes is a logistics software business. Descartes business moat is centred on its Global Logistics Network (GLN). The GLN connects supply chain participants, in real time, giving visibility and control of movement of goods across increasingly regulated and complex global supply chains.
Dollar General is the leading discount retailer in the US, selling a range of everyday household items including food and cleaning products, as well as toys, stationary, and basic apparel. Dollar General has a talented management team, strong track record, and a scale advantage over its competitors. Its stores offer an attractive proposition to a growing cohort of US households that are financially stretched and are not well served by traditional retailers. There are currently 15,000 Dollar General stores across the US and it is rolling out approximately 1,000 new stores every year. We believe the company should continue to deliver low double-digit earnings growth as it expands its store base at attractive returns, takes market share, and repurchases shares. Along with the growth story, we think Dollar General’s business model has defensive qualities. Low price points and value proposition supports its business in difficult economic environments, with sales growth actually accelerating in the last two recessions as consumers traded down.
Dollar Tree is a discount retailer with two store banners, Dollar Tree and Family Dollar. Dollar Tree is a best in class retailer with an excellent record of sales growth and profitability. Every item in store sells at a fix price of US$1. Dollar Tree sells a 50/50 mix of everyday and discretionary items with the latter focusing on events like birthdays, back to school or on twelve or so different holidays (Valentine’s Day, St Patricks, Easter, Halloween, Christmas, etc.). The chain’s fast moving assortment creates a treasure hunt experience that results have shown resonates well with consumers. Family Dollar is slightly different discount store with a multi-price point offering and selling predominantly everyday items (toothpaste, bread, laundry detergent, etc.). Family Dollar customers are financially stretched with an annual household income of US$35,000.
Ecolab is the global market leader that provides cleaning and sanitising solutions for the foodservice, hospitality and healthcare industries. They also provide chemicals and technologies to the water treatment and oil production industries. Ecolab offers a strong value proposition for its vast client base with their product innovations resulting in reduced energy and water usage, lower labour costs and reduced downtime. Ecolab is a high quality company that invests significantly more than its competitors into developing innovative products and this has resulted in continued market share gains. Ecolab has an excellent record of predictable growth and strong growth prospects.
Edwards Lifesciences is the global leader in patient-focused medical innovations for structural heart disease, as well as critical care and surgical monitoring. Driven by a passion to help patients, the company collaborates with the world’s leading clinicians and researchers to address unmet healthcare needs, working to improve patient outcomes and enhance lives.
Essilor International SA designs, manufactures and sells ophthalmic lenses and ophthalmic optical instruments. The company operates through three business segments: Lenses & Optical Instruments, Equipment, and Sunglasses & Readers. The Lenses & Optical Instruments business segment engages in the production, finishing, distribution and trading of lens and instruments. The Equipment business segment engages in the production, distribution and sale of high capacity equipment, such as digital surfacing machines and lens polishing machines, used in manufacturing plants and prescription laboratories for finishing operations on semi-finished lenses. The Sunglasses & Readers business segment engages in the production, distribution and sale of both non-prescription sunglasses and non-prescription reading glasses.
Facebook owns four of the worlds’ most dominant social network and messaging platforms. Despite recent concerns over data privacy, Facebook’s recent results have shown a return to active user growth in its key US market, and the addition of 70 million monthly active users globally in the first quarter.
Floor & Decor is a specialty retailer of hard surface flooring and accessories. Their products include tile, wood, laminate and natural stone floorings. Floor & Decor is an American company with 72 stores across 17 states.
Gartner is the world’s leading research and advisory company. They provide information, advice and tools in most areas including IT, finance, HR, customer service, communications, compliance, marketing, sales and supply chain. Based in Connecticut, United States Gartner operates in over 100 countries with more than 15,000 clients.
HEICO is an aerospace and electronics company. They design, engineer, manufacture, repair, distribute and overhaul parts that are included in any aircraft. They also produce electrical and electro-optical systems for aerospace, defence, communications and computer industries.
Hexcel is a global leader in advanced composites technology – offering a range of stronger, lighter and tougher. Operating in commercial aerospace, industrial, space and defence industries, Hexcel offers hundreds of products in multiple markets around the world.
Hilton Worldwide is an American hospitality company that manages and franchises a large range of hotels and resorts. Some of their brands include the Waldorf Astoria, LXR, Conrad, Canopy, Double Tree, etc. Hilton Worldwide is in over 100 countries with more than 971,000 rooms making it one of the largest hospitality companies in the world.
Icon is a healthcare company that provides specialized services in clinical trial management for the world’s largest pharmaceutical and biotechnology companies.
MasterCard is the second largest payment network in the world, operating in 210 countries and supporting more than 2 billion cards across its network. MasterCard’s growth outlook is underpinned by the secular shift to electronic payments and away from cash, particularly in emerging markets where MasterCard has significant presence. These structural growth drivers combined with increasing margins and high cash flow generation (allowing for substantial share buybacks) supports a strong growth outlook over the medium to long term.
PayPal is a technology-enabled provider of payment solutions, enjoying relationships with over 10 million merchants and 169 million consumers spanning the globe. The company is most well-known for its online payments technology where consumers can purchase online using their PayPal account in a way that is highly secure and doesn’t require sending credit card details over the internet.
Signature Bank is a specialist regional bank, lending largely to wealthy families and private businesses in and around New York. They have a sticky deposit base that comes from managing transactional business accounts for businesses like law firms, accounting firms, and property management companies, a long track record of profitable growth and a very strong history of credit control.
Starbucks is an American multinational chain of coffeehouses. It is the largest in the world with over 28,000 locations worldwide. They offer a wide range of coffee beverages, smoothies, teas, baked goods and sandwiches. They also have their own lines of Starbucks merchandise, whole bean and ground coffee and ready-to-drink products.
Tencent is China’s largest online gaming company with over 50% market share and owns WeChat, the leading social network and messaging platform with over a billion users. The WeChat app is deeply ingrained into daily life in China with the average user spending an hour a day on the platform. Tencent also has leading positions in a range of adjacencies including digital payments (WeChat Pay), music & video streaming, and cloud computing.
TJX Companies (TJX) is an off-price retailer in the US, which also has stores in Canada, Europe and Australia. The company sells branded clothing, such as Nike and Ralph Lauren, as well as some homeware at a 20%-60% discount to a full-price retailer. TJX can sell inventory cheaper than other retailers as it sources stock from store closures, order cancellations and manufacturer overruns – allowing them to sell at a significantly lower price.
Tyler Technologies is the leading provider of software to the local government sector in the US. Despite being the industry leader, Tyler only has 13% market share and we see continued market share gains and margin expansion over the long term. Tyler has a longstanding management team and a great track record, having grown revenue by c.15% per annum and earnings per share by over 20% per annum over the last decade. We see Tyler delivering mid-teens earnings growth over an extended period, with the potential for upside from a faster than expected shift of clients to Tyler’s hosted software offering.
United Parcel Service (UPS) is the world’s largest package delivery company and operates in over 220 countries and territories with its fleet of 100,000 ground vehicles and 530 aircraft. The market dynamics of the global freight industry are compelling, with high barriers to entry given the need for a large international network and delivery route density to be competitive. In addition to the strength of their business model, UPS are set to benefit from the growth in ecommerce activity and increasing cross-border trade volumes in Asia and Europe.
Zoetis a leader in the animal health space (both livestock and companion animal) – an industry with some attractive attributes. Zoetis has strong moats built around IP, brand and a large direct sales force giving them access to key decision makers (including veterinarians) and end-users. The growth runway is underpinned by a couple of secular growth drivers – increased global protein requirements and increased pet ownership and ‘humanisation’ of pets.
Portfolio holdings summary as at 31 May 2020
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