8 stocks Munro like to play the big themes from US earnings season

The recent US earnings season has been characterised as better-than-feared, with 78% of S&P 500 companies reporting a positive EPS surprise and 75% reporting a positive revenue surprise, according to FactSet.

Whilst those numbers sound positive, and are indeed ahead of the respective 10-year averages of 73% and 63% respectively, was the bar simply set too low?

That’s one of the many questions I put to partners and portfolio managers, James Tsinidis and Kieran Moore, from Munro Partners, who very kindly invited me on to guest host the earnings season wrap.

We also discuss how big tech fared during the season and whether or not tech names have had their day in the sun, the opportunity that is AI, China reopening, healthcare’s strong performance during the season, and the Inflation Reduction Act.

James and Kieran also share no less than eight stocks that they like right now, which populate various Munro portfolios.

To tune into the US earnings season wrap, simply click on the link below.  

TOPICS DISCUSSED

• Q1 - Tsinidas: 00:58 - The season has been characterised as better-than-feared. Is that because the bar was set low, or companies have actually been outperforming?
• Q2 - Moore: 03:07 - There has been a notable cloud slowdown for the big-cap tech companies recently. Did this continue in Q1 and what were the outlooks for the companies in Q2?
• Q3 - Moore: 04:55 - How are their costs cutting plans going?
• Q4 - Moore: 05:58 - Are the glory days for tech over or can they return to their previous heights?
• Q5 - Moore: 06:24 - AI – lots going on in this space at the moment and I know Munro is all over it. What are you seeing in the space and have there been any standout stocks?
• Q6 - Tsinidis: 08:25 - Tesla - The company has been cutting prices quite aggressively to maintain market share, with margins coming in at 19% versus expectations of 21%. What do you make of that strategy? Surely it is not sustainable?
• Q7 - Tsinidis: 9:55 - China reopening – What impact is the reopening having, particularly in the travel and payments spaces?
• Q8 - Tsinidis: 12:19 - And what about a bit further up the value chain, in the luxury goods space – knowing China has a burgeoning middle and upper class, what are you seeing in that space?
• Q9 - Moore: 13:03 - What are some of the stocks that you like in the space and why?
• Q10 - Moore: 14:56 - With the names you have mentioned (Eli Lilly and Novo Nordisk), was the growth enough to satisfy the high multiple these stocks trade on?
• Q11 - Tsinidis: 16:31 - Inflation Reduction Act, obviously a big focus for Munro and for you James. We’re almost 12 months in, what, if anything, is happening on the ground?
• Q12 - Moore: 19:12 - Flutter Entertainment – what are they doing so well?
• Q13 - Tsinidis: 21:49 - Liberty Media – what’s the thesis with F1, and can they maintain the revenue and earnings momentum?