12 GLOBAL SHARES TO WATCH
US
Alphabet: As the number of online users and usage increases, so will digital ad spending. Android’s dominant global market share of smartphones leaves Alphabet’s Google well positioned to continue generating top-line growth as search traffic shifts from desktop to mobile.
Walt Disney: The parks and resorts segment has rebounded strongly from the recession, and the opening of Disneyland Shanghai should provide additional momentum. The Star Wars franchise broadens the demographics for the company. Disney’s large library of content with popular franchises and characters reduces the volatility of movie-making over time. BlackRock: The world’s largest asset manager had $6.316 trillion in total assets at the end of March 2018 and clients in more than 100 countries. Product diversity and a heavier concentration in the institutional channel have traditionally provided BlackRock with a much stickier set of assets than its peers.
Microsoft: It has solidified its position as the No. 2 public cloud vendor with its Azure platform, which should provide substantial growth for several years. Windows 10 is the most rapidly adopted operating system Microsoft has released to date.
UK
GlaxoSmithKline: Next-generation respiratory drugs should help offset branded and generic competition to the company’s leading drug, Advair. The firm’s well-positioned HIV drugs are gaining market share quickly and carry high margins.
Schroders: The asset and wealth manager has operations around the globe with a diverse client base.
Germany
Infineon: After a series of smart divestitures of underperforming businesses, Infineon is now focused on its core industrial, automotive and card-security markets. The recent acquisition of International Rectifier should provide it with scale advantages and cost savings.
Deutsche Boerse: This has the most complete suite of services of any of the European exchanges. With the fallout from Brexit, Deutsche Boerse now has an opportunity to poach the London Stock Exchange’s over-the-counter clearing business.
Switzerland
Roche: The company’s biologics constitute three-quarters of its pharmaceutical sales, making the firm the biggest biotech in the world. Collaboration between its diagnostics and drug-development groups gives Roche a unique in-house angle on personalised medicine.
Nestlé: With margins, cash generation and return on invested capital lagging many of its large-cap peers, there may be plenty of low-hanging fruit with which Nestlé could improve its financial performance.
France
LVMH: Louis Vuitton’s fully controlled distribution allows it to avoid discounting its products, which boosts profitability (operating margins in the 40% range) and helps maintain the value perception. The acquisition of Christian Dior Couture will allow the company to diversify its fashion and leathergoods portfolio with another remarkably strong and fast-growing brand.
Hong Kong
Tencent: The online gaming business will retain its dominant position based on its strong distribution capability and research and development investment.