Finding earnings “surprises” before they happen

View the original post including full transcript on Livewire.

Company earnings are forecast to drop off as we move past the post-COVID bounce back in markets. That means that outperformance will be harder, but not impossible, to come by.

That’s where Alphinity’s Global Equity Fund comes in. It adopts an all-weather, agnostic approach to investing that is centred around earnings leadership.

We try to identify companies in positive earnings upgrade cycles that are being driven by some fundamental event or change that’s having a positive impact on the company, such as a new product release. ‘Positive surprises’ as we call them.

There is an element of timing involved here, but it’s not the typical market timing you think. Rather, by timing these earnings ‘surprises’ we are able to ride the share price hikes that typically follow.

In this fund in focus, Portfolio Manager Jeff Thomson takes you through the nuts and bolts of this approach to investing, and explain why it’s so well suited to the the current earnings environment.