{"id":2431,"date":"2023-04-30T16:51:38","date_gmt":"2023-04-30T20:51:38","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/boeing-estee-lauder-and-5-other-stocks-for-a-very-confusing-market\/"},"modified":"2023-04-30T16:51:39","modified_gmt":"2023-04-30T20:51:39","slug":"boeing-estee-lauder-and-5-other-stocks-for-a-very-confusing-market","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=2431","title":{"rendered":"Boeing, Est\u00e9e Lauder,\u00a0and 5 Other Stocks for a Very Confusing Market"},"content":{"rendered":"
\n
<\/p>\n
<\/p>\n<\/figure><\/div>\n

It\u2019s been a wonky year for markets so far\u2014but there may be several stocks to play it.<\/p>\n

While the Federal Reserve has yet to give a clear signal it will pause interest rate hikes, many investors believe that rates will moderate in 2023 as the central bank works to fight inflation. As a result, stocks have rallied this year,\u00a0<\/strong>with the S&P 500 up 9% and\u00a0<\/strong>Big Tech companies generating stellar earnings results all in the face of bank worries and recession fears.<\/p>\n

\n

Several fund managers who attended the\u00a0Morningstar Investment Conference are still looking for bargains\u2014even though many economists such as Bank of America\u2019s Michael Gapen see a case for a mild economic slowdown in 2023. The managers are\u00a0<\/strong>focused on players in the aerospace industry, given the healthy outlook for travel, and companies with strong pricing power that can weather big swings in consumer demand.<\/p>\n

Fidelity Investments portfolio manager Matt Fruhan during a panel on Wednesday said that he\u2019s bullish on U.S. commercial aerospace firms such as
\n Boeing
\n (ticker: BA) and General Electric Company\u00a0 (GE). Passenger air traffic is growing and \u201cwe are still in the recovery phase of covid,\u201d said Fruhan, who has been investing in the theme for the past 12 months to 18 months. <\/p>\n

Demand for air travel in February\u2014as measured by revenue and distances flown\u2014rose 55.5% versus a year ago, according to the latest air traffic report from the International Air Transport Association, which represents some 300 airlines. That figure, however, is still lower than prepandemic levels, matching about 85% of global traffic witnessed in February 2019.<\/p>\n

<\/p>\n
\n
\n\n\n\n\n\n\n\n\n\n\n
Company \/ Ticker<\/th>\nRecent Price<\/th>\nMarket Value (bil)<\/th>\n2024 P\/E<\/th>\nAvg P\/E (five years)<\/th>\n<\/thead>\n
Boeing\/BA<\/td>\n$206.78<\/td>\n$124.40<\/td>\n240.3<\/td>\n116.5<\/td>\n<\/tr>\n
General Electric Company\/GE<\/td>\n98.97<\/td>\n107.80<\/td>\n37.2<\/td>\n22.7<\/td>\n<\/tr>\n
Safran\/SAFRY (ADR)<\/td>\n38.87<\/td>\n66.33<\/td>\n25.8<\/td>\n24.2<\/td>\n<\/tr>\n
Est\u00e9e Lauder Companies\/EL<\/td>\n246.72<\/td>\n88.13<\/td>\n36<\/td>\n35.1<\/td>\n<\/tr>\n
LVMH Moet Hennessy Louis Vuitton\/LVMUY (ADR)<\/td>\n191.99<\/td>\n481.8<\/td>\n25.6<\/td>\n26<\/td>\n<\/tr>\n
Lululemon Athletica\/LULU<\/td>\n379.93<\/td>\n50.26<\/td>\n31.6<\/td>\n40.5<\/td>\n<\/tr>\n
Shiseido Company\/SSDOY (ADR)<\/td>\n50.3<\/td>\n19.95<\/td>\n55.9<\/td>\n47.4<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

FactSet<\/p>\n<\/div><\/div>\n<\/p><\/div>\n

Besides the U.S. names, Fruhan also likes French aerospace supplier \u00a0
\n Safran
\n \u00a0(SAF.France). It\u2019s an engine manufacturer that also sells units like seats and lavatories and offers repair services, adding a recurring revenue stream.<\/p>\n

Nate\u00a0Velarde, co-portfolio manager of the Chautauqua International Growth Fund, bought
\n Safran
\n shares in 2022. He sees the proliferation of low-cost airlines as a tailwind\u2014and is impressed by the company\u2019s\u00a0successive price increases in its spare parts business in 2021 and about 10% in November last year.<\/p>\n

\u201cGiven the broad environment we are faced in, <\/strong>you need to find companies that have the ability to protect margins [through] pricing power,\u201d Velarde told Barron\u2019s<\/em> at the conference.<\/p>\n

Spencer\u00a0Adair, a portfolio manager and partner at Baillie Gifford, says luxury cosmetic brand stocks are the best examples of pricing power, given makeup stands as \u201cabsolutely critical\u201d in any macro environment.<\/p>\n

One of his favorites:
\n \u00a0
\n Est\u00e9e Lauder\u00a0(EL), which was a\u00a0Barron\u2019s<\/em>\u00a0pick last year. Shares are down 0.6% so far this year: Results for the December ended quarter showed prolonged Covid-19 lockdowns affected foot traffic at bricks-and-mortar stores in China. However, Adair expects these headwinds to abate, as China\u2019s reopening gathers steam and
\n Est\u00e9e Lauder
\n accelerates its direct to consumers sales. <\/p>\n

Adair, who manages the nearly $300 billion investment firm, also likes Japanese skincare brand
\n Shiseido
\n (SSDOY), which reported a 6% drop in its China business last year. <\/strong>Adair cited demand from Chinese travelers, who are known for their interest in multi-step skincare regimens, as a tailwind.<\/p>\n

Natasha\u00a0Kuhlkin, a large-cap growth equity portfolio manager at Jennison Associates, sees strength in global luxury consumer brands. While sitting on a panel about the disruption of growth stocks with Adair and Fruhan, Kuhlkin named LVMH Mo\u00ebt Hennessey Louis Vuitton\u00a0(LVMUY) and athleisure brand
\n Lululemon Athletica
\n (LULU). \u201cThere\u2019s a controlled supply\u201d of these companies, she said, adding that they \u201care starting to appeal to more consumers.\u201d<\/p>\n

Lululemon trades at 31.6 times forward earnings, lower than its 40.5 times f<\/strong>ive-year average.
\n LVMH,<\/span>
\n meanwhile, is trading at 25.6 times\u00a0<\/strong>nearly matching its average five-year price-to-earnings ratio. <\/p>\n

Ultimately, it\u2019s all about customer demand and how far can people stretch their frugality. Switching to a cheaper laundry detergent may work for some, but quitting on their go-to-gym leggings might be asking too much\u2014giving companies with pricing power a leg up. <\/p>\n

Write to Karishma Vanjani at\u00a0karishma.vanjani@dowjones.com.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s been a wonky year for markets so far\u2014but there may be several stocks to play it. While the Federal Reserve has yet to give a clear signal it will pause interest rate hikes, many investors believe that rates will moderate in 2023 as the central bank works to fight inflation. As a result, stocks […]<\/p>\n","protected":false},"author":1,"featured_media":2432,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-2431","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nBoeing, Est\u00e9e Lauder,\u00a0and 5 Other Stocks for a Very Confusing Market | iFintechWorld<\/title>\n<meta name=\"description\" content=\"It\u2019s been a wonky year for markets so far\u2014but there may be several stocks to play it. 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