2024 outlooks for 5 key sectors in global equities

Five Antipodes Portfolio Managers joined our latest podcast episode to provide short summaries on the key themes to watch across their respective areas of coverage in 2024.  

Featuring in the episode is:

• Graham Hay - Portfolio Manager, Hardware, Industrials & Commodities
  
• Dr Nick Cameron - Portfolio Manager, Healthcare
• Max Shramchenko - Portfolio Manager, Infrastructure
• James Rodda - Portfolio Manager, Domestic Developed Markets
• John Stavliotis - Portfolio Manager, Emerging Markets

Each PM shares one stock (or area of their coverage) they believe will perform in the year ahead, along with one stock or part of the market they believe investors should avoid.

The episode includes some additional holiday fun, with Alison Savas asking each PM for their Christmas lunch attendance wish-list. 

Stock commentary you hear in this episode and in this wire is illustrative only and not a recommendation to buy, hold, or sell any security. 

The stocks to watch:

Taiwan Semiconductor Manufacturing Co (TPE: 2330)

Semiconductor manufacturing giant TSMC is highlighted as a stock to watch by Graham Hay. He says TSMC is a "key enabler" of artificial intelligence and the infrastructure required to support new technology platforms. 

"It's a stock that hasn't necessarily participated in the excitement (surrounding AI)... TSMC is the world's largest foundry, they provide leading edge semiconductor wafer services to everyone from Apple, NVIDIA, Qualcomm and others. They've been doing that since 1987. They have a very dominant share of leading edge capacity, this is the type of capacity that's required for the generative AI applications that everyone is talking about.

Skip to 01:25 on the podcast to hear more from Graham. 

Alcon AG (SWX: ALC)

Swiss-American pharmaceutical and medical device company, Alcon is well positioned for 2024 according to Dr Nick Cameron. 

Following recent set-backs, Dr Cameron says the company's margins are beginning to recover and strong growth prospects are emerging.  

"We see a really strong margin inflection story happening through 2024 for Alcon, and also we see bolt-on acquisitions, particularly in the eye space - whether it's on the drug side or the device/equipment side - that sets them up for a strong growth outlook."

Skip to 8:20 on the podcast to hear more from Nick. 

American Electric Power Company (NASDAQ: AEP)

This US utility is discussed on the podcast by Max Shramchenko.

Max says regulated utilities in the US might sound boring, but the sector looks incredibly interesting when it comes to valuations. 

"The sector has been through a pretty brutal de-rating over the past couple of months. You have the sector trading at a 20% discount to the S&P on a PE basis... In the last 20 or so years you've maybe had 3 or 4 occasions when the sector was as cheap as now - it would have been the dot com bubble, GFC, and COVID. As long as you're prepared to have a longer term view, it is a very interesting time to be looking at the sector."

Max points to AEP as one of the larger, more liquid names in the space. 

Skip to 15:10 on the podcast to hear more about the US Utilities sector and AEP. 

Oracle Corp (NYSE: ORCL)

James Rodda says Oracle is a "mis-priced and under-appreciated cloud migration story". 

He outlines four key points to highlight the attractiveness of the enterprise technology giant.

1. The Oracle Cloud infrastructure product has emerged as the fourth major public cloud, alongside Amazon, Microsoft and Google. 
   
2. The company is playing a meaningful role in AI development, with key advantages. 
3. It is ahead of back-office tech peers on SaaS transition and cloud migration which provides a major opportunity for revenue uplift.
4. A good management track record for capital allocation, in terms of share buybacks and well-timed acquisitions.

Skip to 21:30 on the podcast to hear more about Oracle from James.

Sendas Distribuidora SA (NYSE: ASAI)

To emerging markets and it is Brazilian multinational, Sendas Distribuidora that looks positioned for a good year, according to John Stavliotis. 

Sendas Distribuidora is Brazil's leading 'cash and carry' grocery retailer, under the ASAI brand name. 

"Cash and carry is Brazil's take on discount grocery retailing, and it's the category that's growing fastest, now about 20% of total grocery sales," says John. 

"Sendas Distribuidora has faced a number of headwinds over the past few years... Things are really turning now, cost inflation in Brazil is declining - Brazil CPI at the last print was below Australia at 4.8%, food inflation is improving, and the supermarkets the company has acquired in recent years have been converted to cash and carry and sales per store have increased by 3x which is pretty impressive. With interest rates coming down, that's going to be another big tailwind."

Skip to 27:05 on the podcast to hear more on the outlook for emerging markets in 2024 from John Stavliotis. 

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