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Switching lanes: the electric vehicle market

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Transport is integral to our everyday lives as it allows us to get to work, visit friends and explore new places. As a result, it presents an interesting sector full of attractive investment opportunities. In this article, I look at how the electric vehicle (EV) market is driving transition in the automotive industry, presenting a new source of growth as fossil fuel vehicles are phased out as we move towards a low-carbon economy. Key geographical players currently dominate the EV market include German BMW and Volkswagen, US-based Tesla, BYD in China and Japanese Nissan. These companies are making progressive developments with Tesla launching earlier this year its Model Y, an electric seven passenger vehicle and more recently its Cybertruck. With global supply chains, these companies can efficiently tap into the global EV market. Nissan for example have pushed their Nissan Leaf into the Indonesia market last year, with the Philippines market in the pipeline for later this year.
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Smith and Nephew (SN)

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In today’s blog I look at the investment case for Smith and Nephew, a FTSE 100 pharmaceutical giant with a market cap of £14,730 million. Since 2015 the stock has returned over 90% and continues to look attractive going forward. It may not provide the super growth that AIM stocks could potential deliver, but it does provide diversification for your portfolio to balance out risk of investing in small- and mid-cap companies. DEMAND The company has three sectors that it specialises in which are orthopaedics, sports medicine and advanced wound treatment. For example, this includes equipment used in operations for knee replacements and rotator cuff repair. The demand for these business sectors should continue to grow regardless of UK economic conditions, as healthcare is of increasing importance. This is supported by the global trend which can be seen in developing countries such as the US, Smith and Nephew’s highest market by revenue, are moving towards an aging popul
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Healthcare: Thematic Analysis

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Healthcare demand is on the up, driven by global thematic themes such as a rise in chronic diseases, increasingly sedentary lifestyles and aging populations. As a result, the sector is predicted to grow with global healthcare expenditure forecasted to increase at an annual rate of 5.4% up to 2020, reaching over US $10 trillion according to Deloitte.  DEMOGRHIC SHIFTS The world’s population is continuing to rise, with the United Nations predicting a one billion increase by 2025 with 300 million being the age of 65 or older. The growing population is also seeing a shift towards the middle class, with developing economies driving growth. The Brookings Institute predicts that 65% of the global population by 2030 will be middle class. The global population, due to increasing urbanisation and standards of living, are becoming increasingly sedentary. Consequently, this is driving the increase of chronic diseases such as diabetes and obesity, with active lifestyles proven to redu
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HSBC Holdings plc (HSBA)

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A stock that I have owned for the last few years is banking conglomerate HSBC, which operates in 67 countries worldwide with Asia its largest market accounting for 45% of total revenue. The bank has over $2,500 billion assets under management globally and is the seventh largest in the world, generating reported revenue in 2018 at $53 million. The bank also delivers a strong yield of 6% that provides a good source of income generation for an investor’s portfolio.  ASIA As mentioned, the business generates 45% of total revenue from Asia, providing geographical diversification for investors versus UK-focused FTSE banks such as Barclays and Lloyds. Due to the global presence of the bank, the stock offers defensive qualities to investors. Positive economic growth is also occurring in the Asia Pacific region with disposable income rising which should relate to people having more funds available to invest or save, resulting in an increase in demand for banking and investment services. A
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Platform Capitalism

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The growing emergence of digital platforms has seen the rise of companies such as Alphabet (Google), Uber and Deliveroo grow to global dominance. These companies are becoming ever prominent in society, highlighted by how ordinary terms have been replaced by brand equivalents such as to search the web is now ‘to Google it’ and ordering takeaway is now ‘I’ll get a Deliveroo’. These companies are disrupting the global economic market through technology-driven innovation, in which investment opportunities are rife. In this blog I look at the founding concepts of these companies through Srnicek’s work on platform capitalism and how this has presented investment opportunities within the different types of platforms.  PLATFORMS All companies mentioned are built on digital platforms, which monopolise and utilise data. For example, Google uses vast data amassed from Internet users and analyses it to produce highly segmented audiences that are more valuable to advertisers. As such, Google
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UK Legal Market

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The UK law sector is one of the leading global legal markets, rated as the second largest in the world by fee income and was valued at £35.1 billion in 2018. This represents a 6.3% increase, or a 3.7% real increase if you factor in inflation from the previous year, showing a healthy growth within the sector. The market itself is very diverse with over 9,500 law firms and 91,000 solicitors in the UK showing not only the high demand for legal services but also the high levels of competition that exists. It is therefore important to look for firms that stand out in the market and can continue to deliver strong performance. MARKET The market looks set for sustained growth, with the Law Society predicting 2.2% average annual growth from 2019-2025 with a soft Brexit, or dropping to 1.5% with a 'harder' deal. Brexit will be a key factor on the sector’s growth rate due to its focus on the UK domestic market, increasing its sensitivity to Brexit outcomes and the surroundin
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Aviva (AV)

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Back in November when Aviva’s share price dropped below £4 I thought that it would bounce back after a sharp market sell off. Though shares did continue to drop further, all the way down to below £3.65 in December, the market returned to normal levels of £4.30 before again dropping off to sub £4 levels recently.  The question for investors therefore is, can the stock once again rebound and return to the £5 mark or will it see another sell-off to drop even further than current valuations. NEW CEO Aviva is taking steps in a new direction with the departure of former CEO Mark Wilson, and the arrival of Maurice Tullock as his replacement. Though people were happy with Wilson’s revival of Aviva, it is arguably the right time for someone new as Wilson has completed his task at the company.  Further management shake ups are happening with Aviva’s chief of finance, Tom Stoddard stepping down at the end of the year, ending a five year reign with the company. The new CEO also plans t
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