Yahoo Finance William Blair Commentary- Investing Expeditions: Seeking Potential, From Japan to Indonesia
Research trips are an integral component of our active, fundamental investment process. Our investment teams meet with different companies, attend conferences, and travel to new markets around the world, gaining insights for our clients and a deeper understanding of potential investments.
Below, we highlight some of the research trips our teams have taken. For more insights, visit our interactive research map.
Indonesia's Investment Implications
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Johnny Chen, CFA, a portfolio manager on our emerging markets debt (EMD) team, traveled to Jakarta, Indonesia, to explore opportunities and risks, learning that the world's fourth-most populous country offers significant potential for EMD investors.
For Indonesia, There are more positive than negative points, especially relative to other emerging markets, he says. We believe front-end local currency rates will likely see the most benefit in the current environment, though the currency may be slightly riskier due to the commodity linkage and as elections draw closer. Meanwhile, for hard currency debt, we believe continued fiscal consolidation and less issuance should anchor speeds.
Looking Behind the AI Curtain
Josh Overholt, a research analyst on our U.S. value equity team, attended the annual TD Cowen Technology, Media, and Telecom Conference in New York City to dive deeper into emerging sector opportunities, in particular artificial intelligence (AI).
It was a tech conference, but we're in the midst of the AI hype cycle, and it really felt like an AI conference. We spent a lot of time talking with companies, and what became clear is AI, while an interesting technology, is still in that hype-cycle phase, he says.
What that means is it creates opportunities for us to look at compelling investments in companies that have been impacted by the concern of AI impacting their business, says Overholt. And that's exciting because it gives us an opportunity to get to know really good companies whose prices have been impacted by the AI hype.
Long-Term Growth Prospects in Ethanol Plants and Fish Hatcheries
While on a research trip to Shenandoah, Iowa, Henry Baby, CFA, partner, a research analyst on our U.S. growth and core equity team, toured an ethanol plant and fish hatchery to evaluate different investment prospects.
He found that technological advancements allow for byproducts from ethanol production to be used in the production of high-protein animal feed. In addition, advancements in alternative fuels, and economic opportunities associated with more sustainable production and consumption, can provide compelling long-term growth prospects.
Assessing Potential Investment Opportunities in Japan
Our global equity team traveled to Tokyo, Japan, meeting with many different companies across sectors and market capitalizations. Research Analyst Tommy Sternberg, CFA, partner, met with roughly a dozen healthcare companies during the trip.
He found that Japan is a hotbed for drug development, with strength in oncology, neurology, and rare diseases; out-licensing remains a primary source of monetization, but Japanese drugmakers are increasingly retaining global rights; and a selective approach to investing in Japanese pharmaceutical companies could be key as opportunities present themselves.
Sternberg and the team also gathered several critical insights into Japan's economy and business environment. As a result of a tightening labor market and consumers learning to accept price increases, deflation has receded in Japan. Notably, tourism has resumed in full force, which should continue to be supportive of the country's economy in the near term. Corporate reforms are gaining traction as well, with greater pressure from Japan's government, stock exchange, and activists to improve efficiency and returns.
This article first appeared on GuruFocus.
