Claremont Global pins hopes on Adobe and Alphabet for stellar 2024 market performance

By Newsdesk

December 05 2023
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Asset management powerhouse Claremont Global is banking on the continued success of US-based IT giants Adobe and Alphabet to bolster its market performance come 2024.

Claremont Global pins hopes on Adobe and Alphabet for stellar 2024 market performance

Riding high from a year of substantial growth, Claremont Global, which manages a hefty $1.4 billion, has singled out these two companies as pivotal players in its high-conviction investment strategy.

Adobe made headlines with its impressive third-quarter revenue, clocking in at $US4.89 billion up to September 1, which marked a robust 10% growth from the previous year. Alphabet, the parent company of Google, also exceeded expectations with its third-quarter figures thanks to a strong showing in advertising and cloud revenues.

Bob Desmond, Head of Claremont Global and co-Portfolio Manager, commented on Alphabet's financials, "the fastest of the three largest US cloud providers," he noted, "while its reported financials were much cleaner this quarter, following the restructuring charges taken earlier in the year." Desmond assures that Claremont Global will continue to scrutinize "operating and capital expenditure associated with Artificial Intelligence initiatives," signaling a strategic approach to investments in tech-focused business operations.

Adobe's market dominance has not gone unnoticed, as Desmond spotlighted its suite of over 100 innovations and updates across Creative Cloud that push the boundaries for professionals in the field. He particularly praised Adobe Firefly and its AI-powered features, revealing that "there have been more than three billion image generations to date" since its initial launch in March, demonstrating a substantial customer engagement with the technology.

True to a philosophy that prioritises quality over quantity, Claremont Global keeps its portfolio lean, with only 10 to 15 stocks, choosing to bet on global companies of the highest caliber rather than play a numbers game. These investments are time-tested, with Desmond stating, "the companies in our portfolio have proven themselves over decades, with the average heritage being more than 80 years."

Highlighting a resilience to economic downturns and bear markets, the selected companies are lauded for their ability to rebound from adversity, "with any decline in earnings and value is likely to be temporary," according to Desmond. He attributes these traits to conservative leverage, insulation from unpredictable market variables, and an innate capacity to weather both external shocks and internal shifts.

Claremont Global’s portfolio also includes formidable names like LVMH, Nike, Visa, Microsoft, Equifax, and CME. Desmond enthuses over the qualities that these companies share: "strong organic growth, a good understanding of their competitive advantage, recurring revenues, low cost to the value delivered, high margins and low capital intensity, which delivers very strong free cash flow."

With such a focused approach and a collection of stalwart stocks, Claremont Global is poised to navigate the uncertainties of 2024 with confidence, aiming for continued success underpinned by industry-leading technological advancements and strategically managed investments.

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