13 stocks positioned for the future, priced right in the present

Everything changes, everything stays the same. 

For all the changes occurring in the world right now - geopolitics, climate risk, and technological disruption - when it comes to investing, the underlying core principles remain the same.

Well-balanced investors look for long-term opportunities in businesses built to last, positioned for the future, and priced right in the present.

That's the approach of Kirsteen Morrison, Senior Portfolio Manager at Impax Asset Management, which directs capital to areas of the market with structurally higher growth and that are enabling the transition to a more sustainable economy.

In the following interview, Morrison shares how Impax is navigating the volatile macroeconomic backdrop, including the return of Trump-era tariffs, the dual-edged nature of AI, and where real opportunities lie in energy transition and beyond.

A broader range of outcomes

The re-election of Donald Trump and the imposition of new tariffs have added another layer of complexity to the market.

“Uncertainty has dramatically increased and, with it, the range of possible outcomes for the economy and stock market,” Morrison says.

She notes that the market initially responded with optimism to Trump’s re-election, viewing it as pro-growth. But that changed "following the announcement of ‘Liberation Day’ and the subsequent rise in tariffs”. 

“If implemented in their current form, this would likely result in higher inflation and weaker corporate and consumer sentiment, with the possibility of stagflation.”

Morrison sees two distinct paths from here: “If the tariff announcements are simply a negotiating position and some form of compromise is reached, then we could be back in a more constructive growth scenario.”

A balanced approach

In response, Impax isn’t making wholesale shifts, but rather fine-tuning its positions: “We are adopting a balanced approach, with a focus on fundamentals,” Morrison says. 

“We are looking for companies that have pricing power, strong competitive positions, and good management teams that we know well and who have navigated uncertain times before.”

In terms of positioning, Morrison says the portfolio has adjusted selectively.

“We’ve been consolidating some of our financials holdings, adding to strong regional banks in the US and Europe, and selling out of a US diversified financials name.”

Elsewhere, Impax is taking advantage of opportunities in healthcare. “We’ve also added to a recently acquired animal healthcare provider,” she says.

On the flip side, they’ve been trimming exposure where volatility and macro risks are intensifying. “We’ve trimmed some holdings where we see greater risk to the earnings outlook from trade tensions, such as ASML (NASDAQ: ASML). We’ve exited some lower conviction names like Unilever (LON: ULVR) and Croda (LON: CRDA).”

“We’ve been adding to companies that benefit from the rollout of AI, such as workflow automation company ServiceNow (NYSE: NOW), and LSEG (LON: LSEG), which provides critical data infrastructure and services,” Morrison says. “We also hold Marvell (NASDAQ: MRVL), which is a key supplier of chips for AI workloads.”

Mispriced energy transition assets

Despite headlines around pushback on climate policies, Morrison is clear: 

“The economic drivers of the transition to a more sustainable economy remain intact.”

She sees dislocation between perception and valuation. “Many assets look mispriced, either because of sentiment, policy noise, or changing technology and supply chains,” she explains. 

“This provides fertile ground for active, long-term investment.”

That approach starts with fundamentals. “We look for companies with strong management and attractive financial metrics,” she says. “We avoid businesses that are likely to be disrupted by policy shifts or changes in the supply chain.”

Within that transition, grid infrastructure is front and centre.

“We hold Hubbell (NYSE: HUBB), which provides a range of energy-efficient electrical and lighting products to sectors such as buildings and utilities,” Morrison says. “It is well-positioned to benefit from rising electricity demand and the need to increase grid resilience in the US.”

She also highlights a key European player: “We also hold Schneider Electric (EPA: SU), which provides energy management and automation solutions for industrial facilities, buildings, data centres and other critical infrastructure. It has delivered resilient margins, strong returns, and consistent cash generation.”

The AI opportunity - and challenge

Morrison is clear-eyed about the dual-edged nature of AI. “AI is a double-edged sword,” she says. 

“On the one hand, it brings enormous productivity and efficiency gains. On the other, it comes with a big increase in energy use.”

She sees a phased evolution. “At present, we are in the investment stage of the AI cycle, where large amounts of computing power are required to train and run models. Over time, as AI is integrated into workflows, we expect to see productivity gains and cost savings.”

For Impax, that means focusing on enabling technologies. “We are holding companies that help customers manage energy demand, such as Schneider Electric, and others that support productivity gains, such as ServiceNow.”

In healthcare, the application is tangible. “We also hold companies that use AI in areas like surgery,” Morrison adds. “For example, Intuitive Surgical (NASDAQ: ISRG) uses AI to improve the precision of robotic-assisted surgery and improve patient outcomes.”

AI isn’t just about software. Morrison sees big opportunity in chip design innovation.

“We hold Marvell, which designs application-specific integrated circuits (ASICs) that can be optimised for specific AI workloads and offer greater energy efficiency than general-purpose chips.”

Packaging innovation is another key lever. “We also hold Applied Materials (NASDAQ: AMAT), which provides tools for chip packaging, enabling chips to be stacked vertically, improving performance and reducing energy use.”

And in design: “We hold Cadence Design Systems (NASDAQ: CDNS), which provides software for chip design and verification. It uses generative AI to increase productivity and reduce time to market.”

Where the next opportunities lie

Looking ahead, Morrison identifies three sectors with potential:

1. Healthcare innovation

“Ageing populations and pressure on healthcare costs are driving demand for better healthcare delivery,” she says. 

“We are focused on companies that can increase hospital throughput and improve patient outcomes.”

Key holdings include, “Boston Scientific (NYSE: BSX), which has a strong pipeline of minimally invasive devices, and Intuitive Surgical, which uses robotic-assisted surgery to improve outcomes and reduce length of stay.”

2. Insurance and climate risk

“Insurance and reinsurance are key themes in the portfolio,” Morrison says. “RenaissanceRe (NYSE: RNR), a reinsurer, is benefiting from a strong pricing environment driven by increased demand for insurance and a reduced supply of capital.” 

She also points to Marsh McLennan (NYSE: MMC): “They provide insurance brokerage and risk management services, helping clients manage climate risk and invest in climate adaptation.”

3. Consumer adaptability

Finally, Morrison is watching how consumers respond to economic stress. “We are focused on companies serving the value-conscious consumer, or those benefiting from brand loyalty,” she says.

Two examples: “eBay (NASDAQ: EBAY), which generates around 40% of revenues from resale, and could benefit from greater frugality. Haleon (LON: HLN), a leader in OTC consumer health with strong brands like Panadol and Sensodyne, benefits from high brand loyalty and strong pricing power.”

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