Investing in Growth & Change: Recent Episodes
Alger
The Alger Podcast features Alger Investment Professionals and Industry Experts, giving timely market and sector updates. For more information, visit: www.alger.com
Investors looking beyond mega-cap AI winners, might now be considering underappreciated opportunities. And one such area that we’re looking at today is mid caps.
Much of the current conversation around AI has focused on U.S. companies — where the best investments may lie and what risks could derail the story. But what about opportunities outside the U.S.?
In this conversation, Redwood portfolio managers Alexi Makkas and Don Smith break down how governance reforms, capital return frameworks, and evolving policy environments are shaping international markets, and how these changes may be creating new investment opportunities outside the U.S.
Mid Cap Growth Portfolio Manager Brandon Geisler discusses the newfound attention that mid cap companies are now having in the AI conversation.
Alger Director of Market Strategy Brad Neuman discusses the new industrial renaissance and what that may mean for investors.
Alger Portfolio Manager Dr. Ankur Crawford discusses AI, the metaverse, humanoid caregivers, stablecoin, and whether or not Apple should buy OpenAI.
"We think one of the most exciting non-U.S. inefficient areas is in smaller caps, because in small caps, you're layering on the geographic opportunity as well." The Alger Redwood team takes a closer look at Europe, Japan and China and review their thesis on how investors might better take advantage of non-U.S. market inefficiencies.
"The inefficiencies outside the U.S. are significant. International markets are more fragmented and offer opportunities that are very exciting. Even when macros are against us, we’re finding businesses that we want to own." The Alger Redwood team takes a deep dive into international opportunities that U.S. investors may be missing.
"I like to say when software writes software, innovation becomes exponential. And I think we’ve never lived through exponential innovation as a society." Alger Portfolio Manager Dr. Ankur Crawford discusses the Concentrated Equity strategy and how it may provide investors with a direct conduit to Alger's highest conviction ideas on the theme of innovation.
"The strategy brings research and development and intangibles out of the shadows of financial statements and allows investors to find potentially attractive investments." Alger Director of Market Strategy Brad Neuman discusses the recently launched top-down strategy created in conjunction with Russell, and how it may create opportunities to directly invest in rapidly accelerating innovation.
"Analysis requires a mindset and an approach that is willing to handle lots of uncertainty and is able to imagine outcomes that are both very good and very bad and not necessarily linear." In celebration of Alger's 60th anniversary, we present part two of a special interview with Chief Investment Officer Dan Chung, reflecting on his 30-year journey with the firm. In this conversation, Dan discusses Alger's long-term focus on fundamental research and the continuing importance of investing in innovation.
"The reality is that AI is working right now in our economy and it’s only going to grow. We’re asking where can we make smart investments that have a long duration exposure to the overall theme." Alger Mid Cap Growth Strategy Portfolio Manager, Brandon Geisler, discusses how predominant AI has become in our everyday lives, the future of "small language models" and mid cap opportunities to consider.
"I can’t think of an industry that won’t be impacted by artificial intelligence. And it will be a lot easier to roll out than electricity, the internal combustion engine or even the Internet." Alger Director of Market Strategy, Brad Neuman, CFA, discusses why he considers AI the most important innovation of our lifetime, and how most businesses will need to adopt it to remain viable.
In celebration of Alger's 60th anniversary, we present part one of a special interview series with Chief Investment Officer Dan Chung, reflecting on his 30-year journey with the firm. In this conversation, Dan shares insights into his formative years as a research analyst, learning the ropes and discovering a special affinity for the tech sector.
"AI represents a massive TAM. If you can replace or significantly enhance the productivity of labor, a $30-40 trillion market, that is a massive TAM. And even a fraction of that market is still a significant TAM." Portfolio Manager Patrick Kelly discusses the recent launch of the Alger AI Enablers and Adopters strategy and why he thinks artificial intelligence is the most generationally transformative investment theme of this era.
"We think Wingstop is a category leader with a strong moat. That combination of strong same-store growth, durable unit growth and asset-light franchise model really exemplifies what we look for in Small Cap Focus." Alger Small Cap Focus Portfolio Manager Amy Zhang discusses why she thinks Wingstop is really a technology company that happens to serve chicken.
"Forty percent of the U.S. population are technically obese and over ten percent are severely obese. So, we think a lot of the excitement is that, wow, we could apply these therapies to tens of millions of people." Alger Senior Healthcare Analyst, Keye Chow and Associate Analyst Yinglu Zhang, Ph.D., discuss GLP-1's origins as a diabetes drug and some barriers it may face in its attempt to revolutionize the weight loss market.
"Within the mid cap space, some pretty significant macro headwinds are becoming tailwinds. We believe that this has created significant opportunity in the mid cap space, and possibly the biggest mid cap growth discounts that we've seen in decades." Alger Mid Cap 40 ETF Portfolio Manager Amy Zhang, CFA, and Product Specialist Art Nowak, CFA, weigh in on why investors may want to stop underestimating mid caps.
"People forget about the compounding aspect of dividends. But over the past fifty years, approaching 75% of the S&P 500 return is from reinvesting those dividends back into the index and getting that compounding element." Alger Growth & Income Portfolio Manager Greg Adams, CFA, takes a look at one of the most underappreciated areas of growth investing: innovative companies that also generate dividends and maintain high free cashflow.
"I remain skeptical because I talk to a lot of companies in the real world, and I think if it’s a normal public company, they don’t really know what to do with generative AI. I think this will come over time, but I think of it as more like three to five years out." Alger Weatherbie Select 15 Portfolio Manager Ed Minn, CFA, takes a hard look at what companies are doing to leverage the potentially transformative opportunities afforded by generative AI.
"We’re now finding innovation in many other sectors outside of technology, and we're seeing the distribution of innovation extend well beyond the U.S." Alger International Focus Strategy Portfolio Manager Pragna Shere discusses the factors driving Europe's resilience, specific investment opportunities, and reasons for considering non-U.S. equities.
"Profitability and consistency of revenue has been very important to us. We like to play with a top three player. We don’t want to necessarily participate in a languishing asset." Alger Mid Cap Growth Portfolio Manager Brandon Geisler discusses portfolio construction and why mid caps may be the most underappreciated asset class.
"There are a lot of non-U.S. companies that are just not as savvy as U.S. companies at telling their story. And that can cause a real gap between what a company is worth and what it's currently valued at." Alger international and emerging markets Portfolio Manager Greg Jones, CFA, discusses finding deep pockets of growth in corners of the world that investors may be overlooking.
"Post-Covid, the digitization of cash and contactless interactions has accelerated. Today's POS systems can collect and track data that helps a clothing store operate their loyalty program, a restaurant track reservations, or a bike shop manage its inventory." Alger Senior Analyst Darryl Ah Now takes a comprehensive look at the rapidly changing world of Point-of-Sale Systems.
"We think Generative AI is potentially one of the biggest technology shifts in history. We believe it will create winners and losers across sectors, and become table stakes in many sectors in order to successfully compete." Head of Alger Capital Appreciation and Spectra Strategies Patrick Kelly takes a comprehensive look at the radical implications of AI.
"We believe there may be more banks that fail in the coming months due to deposit runs and asset/liability mismatches. However, it should be noted we believe this banking crisis is completely different from the Great Financial Crisis of ’08-’09." Alger Dynamic Opportunities Portfolio Manager, Dan Brazeau, CFA, answers investors' questions regarding the recent banking crisis.
"Coming through the pandemic, we've suddenly seen the supply chain crunch that hit the transportation industry really ease. And we think that's an area ripe for potential investment." Weatherbie Enduring Growth Portfolio Manager, Josh Bennett, CFA, discusses unheralded opportunities in transportation, trucking and third party logistics.
“We think the case for growth is as strong as ever. And we think this is due to two structural factors.” Investors have been asking some difficult questions about the current state of growth investing. Alger Director of Market Strategy, Brad Neuman, CFA, provides answers.
"The negative returns associated with growth stocks were in large part driven by a massive valuation compression, the likes of which you or I haven’t seen in our lifetimes." Alger Client Portfolio Manager Kevin Collins discusses the events that drove growth's downturn in 2022 and how this style of investing has historically responded coming out of such difficult markets.
"COVID was an unprecedented downturn. Never before had the entire globe shut down all travel. Fast forward to where we are now, and U.S. air travel is within ten percent of fully recovered from pre-COVID levels." Alger Senior Analyst Andrew Gustin describes why the aerospace industry has remained resilient over the past year, and which subsectors may be most interesting to investors.
"Coming out of the downturn, we think you're going see technology-driven companies get leaner. And they tend to act faster when they do so. And for the big incumbents it may actually be good for them, because they'll have less people chasing them." Alger Senior Analyst Ben Reynolds weighs in on the current economy and why ecommerce, streaming and digital advertising remain dynamic investing opportunities.
"This surge in innovation isn't just concentrated in technology anymore. We’re seeing it in energy, fintech, manufacturing, and in autos." Alger International Portfolio Manager Pragna Shere, CFA, discusses the surprising dominance of European innovators and how this knowledge may create opportunities for investors.
"Stepping back from all the macro noise, we see a tremendous amount of innovation and change across the economy that we think will continue to create winners and losers across sectors." Alger Capital Appreciation Portfolio Manager Patrick Kelly discusses current market gyrations and why high levels of innovation could be considered a long-term deflationary force.
"When the VIX is higher, which we have seen going back to 2020, ’21, and now recently, we think that’s a fantastic period for long/short equity." Alger Client Portfolio Manager Alan Kirby discusses investors' concerns with the current economy and why he thinks the antidote is maintaining a solid, long-term strategy.
"We believe that productivity is driven by innovation, and that innovation is actually speeding up, not steady or slowing down." Alger Director of Market Strategy Brad Neuman, CFA, discusses Alger's new Capital Markets Presentation "Navigating a Weakening Economy" and why he thinks investors may be wise to reconsider growth stocks.
"Starting to manage a portfolio in a down market is tricky, but I see it from a positive perspective because it's presenting tremendous opportunities." Alger Mid Cap Growth Portfolio Manager Brandon Geisler discusses the kind of companies he looks for when constructing the portfolio, and why he's particularly focused on electric vehicles.
"Globally, the energy transition is going to be one of the largest undertakings of this century, and that’s exciting because it creates a vast range of opportunities." Alger Analyst Mark Werner, CFA, takes a look at how some companies are accelerating alternative solutions to Europe's energy crisis.
"Businesses in FinTech are now competing with legacy bank infrastructure, and we think they can go out and find consumers and monetize them at a much better rate than many traditional banks ever have." Alger Analyst Christian Yeager takes a deep dive into the current state of financial technology and which companies may outperform in the long run.
"We’re now investing in companies that are recognized as every bit as good as those in developed countries." Alger Emerging Markets Portfolio Manager Greg Jones explains why innovation and rapid digital transformation have enabled emerging markets companies to aggressively compete with the U.S. and other developed nations.
"We're paying attention to inflation and the path of the federal reserve. And if we’re going into recession, dividends can be pretty defensive." Alger Growth & Income Strategy Portfolio Manager Greg Adams explains why companies with a focus on free cash flow may outperform in a difficult economy.
"We believe that mid cap stocks are deeply undervalued, especially when compared to their large cap brethren. And we think this could be a coiled spring for these growth stocks moving forward." Alger Vice President and Product Specialist for the Investment Research team, Arthur Nowak, CFA discusses why he thinks growth stocks today are so deeply discounted.
"Currently, mid cap stocks are trading at a significant discount to the S&P 500, which we believe creates a valuation tailwind combined with strong fundamentals." Alger Mid Cap 40 ETF Portfolio Manager Amy Zhang explains her process of managing during challenging markets.
"While sentiment may go up and down, ultimately a company’s fundamentals or earnings capability will dictate its value." Alger Weatherbie Select 15 Portfolio Manager Ed Minn explains why he continues to focus on high-conviction ideas and fundamentals.
"Essentially, we’re talking about individuals that are outside the formal economy. in the last ten years, because of advancements in technology, nearly one billion individuals have shifted from being unbanked to having a banking product." Emerging Markets Portfolio Manager Greg Jones explains why financial inclusion may be changing entire economies for the better.
"What drives this portfolio is fundamental stock research. And if the price of a stock suddenly falls by half, it becomes even more attractive." Client Portfolio Manager Alan Kirby explains how the Dynamic Opportunities portfolio may find opportunities even in challenging market cycles.
"We’re carefully watching developments in neighboring countries such as Poland, which is a pretty good-sized economy and smaller markets in Czech and Hungary, neighboring countries that have exposure to Russia." Emerging Markets Portfolio Manager Greg Jones discusses the possible economic impact of sanctions now being imposed on Russia.
"We believe that the secular trends that were in place for 2019, for the most part, are in place now, and that fundamentals for the true long-term growers are intact." Alger Senior Analyst Ben Reynolds, CFA, explains why ecommerce and streaming companies may lead the drive back to growth.
"If lower prices are accompanied by better and improving fundamentals, we believe that’s a potential buying opportunity." Alger Director of Market Strategy Brad Neuman, CFA, explains why investors may benefit from a renewed focus on innovation and long term fundamentals.
"Once we’ve defined areas of central interest, we try and track where the greatest unmet needs are and where the greatest potential market opportunities can be." Health Sciences Portfolio Manager Dr. Sanjiv Talwar explains why his team is focused on innovative advancements in scientific, clinical, and commercial arenas.
"We think that the metaverse is going to profoundly change the way people work, play, and live. And companies that are levered to that kind of growth are Alger-type businesses." The age of the metaverse is upon us. But what is it and how will it impact the way we invest? Portfolio Manager Dr. Ankur Crawford takes a deep dive into this brave new world.
"For a company to grow from small to large, it must be able to control its own destiny. How do you control destiny? By having a strong, competitive advantage." Portfolio Manager and Active U.S. Equity Manager of the Year Amy Zhang discusses her focus on the long-term advantages of small caps.
"This is an adjustment phase. We believe there will be opportunities for companies that have the complete support and backing of the government." Emerging Markets Portfolio Manager Greg Jones explains the impact of the striking new regulatory changes in China.
"There is increasing emphasis on technology in many large restaurant chains. We believe this trend will only continue to explode." Alger Senior Analyst Vikram Khullar explains how pervasive technology innovations have become within the restaurant industry.
"Our job, as investors, is to identify why companies may have much better or worse scores than what we thought was appropriate and then try to understand specifically what’s driving those deltas." Investors have asked, How does Alger's ESG review process actually work? Alger Senior Analyst Shef Osborn takes a deep dive into that question.
"The shortage in the labor market has incentivized companies to look at their labor practices, and we see that as a very positive development." Alger Analyst Leeanne Su explains why the social and governance changes that employers are making may be revolutionizing the consumer sector.
"As the frenzy in the SPAC market continues, impacting hundreds of companies, we believe investors should make sure they understand the ramifications." Weatherbie Chief Investment Officer George Dai explains the positive and negative implications of the current onslaught of special purpose acquisition companies.
"Many of our companies are talking about inflation. But we believe investors will see this type of cyclical-driven inflation start to cool off over the next six to 12 months." Alger Senior Analyst Andrew Gustin explains why the industrials sector is now experiencing a significant resurgence.
"Momentum strategies today are buying airlines instead of artificial intelligence; cruises over cloud; and steel instead of software. But we know that the pendulum can swing very quickly." Alger Client Portfolio Manager Kevin Collins, CFA, explains why Alger favors investing in innovation and change over the siren song of momentum.
"The disruption in education was extreme, but we think this new business model will continue to experience strong growth even as students head back to campus." Weatherbie Capital Portfolio Manager Dan Brazeau explains why he thinks the rapid transformation in e-learning is only just beginning.
"We believe we have a good idea of what will remain strong growth trends both during the reopening and after." Alger Chief Investment Officer and Portfolio Manager Dan Chung explains how he manages the focused, best ideas Alger 35 portfolio.
"We’re being inundated with new ideas. But our job, as fundamental analysts, is to sort through the noise and find the companies that are extending that competitive advantage over time." Weatherbie Specialized Growth Senior Portfolio Manager Josh Bennett explains how rapid innovations are transforming the digital payments industry.
"The more successful companies already have their digital transformations underway and that raises the game for everyone." Weatherbie Specialized Growth Portfolio Manager Ed Minn explains how companies are evolving their strategies to fully incorporate artificial intelligence.
"What we're seeing is that shareholders, such as ourselves, are starting to let management teams know that environmental, social and governance (ESG) standards are important." Senior Analyst Dan Sheridan discusses how investors' increasing focus on ESG is driving companies to make significant, long-term changes.
"We are reaching out and engaging with companies to see how aware they are of outstanding Environmental, Social and Governance (ESG) issues and what they're doing to address them going forward." Portfolio Manager Greg Adams describes Alger's ESG review process and how our analysts increasingly use these guidelines in their research.
"Today, we believe the opportunities that exist in developing countries look much more like they do in the U.S. than was the case ten years ago." Emerging Markets Portfolio Manager Greg Jones discusses why, following the COVID crisis, developing countries may continue to see a significant period of outperformance over developed markets.
"Sustainability is a common theme for our companies. ESG themes, like renewable energy, are now undergoing seismic changes." Portfolio Manager Amy Zhang, CFA discusses the importance of ESG investing and how it may impact her new Mid Cap 40 ETF portfolio.
"Major cities in India are close to approaching herd immunity, and we think the speed of the recovery is being underestimated by the markets." Portfolio Manager Pragna Shere discusses why some emerging markets companies have thrived over the past year and if such accelerated growth is sustainable.
"The methodology of the Weatherbie Way dates back to the Voyager Fund, when I first determined a pattern recognition that has now enabled our team to consistently identify great companies in mundane industries for a period of decades." Weatherbie Capital Chief Executive Officer Matt Weatherbie reflects on his firm's 25th anniversary and how he cultivated the "Weatherbie Way" of investing.
"The FAANG companies have created large opportunities for themselves and they continue to successfully exploit them. But we are very excited about this simultaneous wave of innovation that’s reshaping the global economy." Client Portfolio Manager Kevin Collins discusses the recent observation that Alger’s Large Cap Strategies have been underweight FAANG stocks and why that may be beneficial for investors.
"As we look to 2021 on the long side, we believe strongly that our companies are poised for continued growth just because of the changes that are accelerating in the economy. And on the short side, I don’t think we’ll have any lack of raw material to work with." In our latest podcast, Client Portfolio Manager Alan Kirby discusses why investors might consider a hedged equity solution.
"We are at the beginning of the fourth industrial revolution, and there is no industry that is not touched by this revolution." In our latest podcast, Portfolio Manager Dr. Ankur Crawford discusses how rapid digital transformation, as accelerated by COVID, may be a generational opportunity for investors.
"Historically, students and families would be able to walk down the hall and get assistance from a tutor on campus. In this new environment, companies that can provide these same services digitally may likely see significant growth." In our latest podcast, Portfolio Manager Dan Brazeau discusses how companies that provide online learning services appear to be having a positive impact on education as thousands of students return virtually to college.
"In a post-COVID world, we believe companies will have to be digital to survive." In our latest podcast, Portfolio Manager Patrick Kelly discusses how companies across sectors need to digitally transform themselves to remain relevant and competitive.
"The reality is every so often a low-probability, high-impact event happens. And Covid-19 acutely reminds us that we need to be as prepared as possible." In our latest podcast, Weatherbie Specialized Growth Portfolio Manager Ed Minn discusses how this year's crisis has caused companies to quickly evolve their administrative infrastructure.
"Online sports betting has emerged as a new market and this has gained steam in recent months. When we see a new online market get created, we get pretty excited." In our latest podcast, Alger Analyst George Ortega gives an overview of some of the rapid transformations that have been occurring in online gaming and entertainment.
"You have millions of people who maybe haven't ordered consumer products online, who now see the benefits and the convenience factor. We believe this behavior will be quite sticky." In our latest podcast, Alger Analyst Leeanne Su explains how the recent crisis has caused both retail practices and consumer behaviors to evolve.
"We're seeing opportunities in countries where the virus hit first as those may be the first to recover." In our latest podcast, Alger Portfolio Manager Pragna Shere provides a global perspective on the current economic crisis and how companies in different geographies may be affected.
"When the virus started ramping up in China, I had real-time information regarding how serious the situation was." In our latest podcast, Weatherbie Senior Managing Director and Co-Chief Investment Officer George Dai discusses companies that are working towards a vaccine and how his experience in China has informed his recent investment decisions.
"I think the current volatility in the market presents great opportunity for our strategy." In this podcast, Alger Executive Vice President and Portfolio Manager Amy Zhang discusses how high quality small cap companies with strong secular drivers may do well in the current economic environment.
"Patrick and Ankur talk about a simultaneous wave of innovation that is recasting whole industries across our economic spectrum." In our latest podcast, Client Portfolio Manager Kevin Collins discusses the investment process of Portfolio Managers Patrick Kelly and Dr. Ankur Crawford, and how they maintain Alger's legacy strategies.
"With focused strategies, the portfolio manager cannot hide behind mediocre stock picking. We aim to strike the optimal balance between maximizing exposure to best ideas, while having enough positions to achieve adequate diversification." Ed Minn, Portfolio Manager for the Alger Weatherbie Select 15 strategy, discusses what it's like to construct and then manage one of Alger's most focused portfolios.
"In the new media ecosystem, it's unlikely that consumers will subscribe to 20 paid television services. So, the vast majority of content will still be ad supported." In this podcast, Weatherbie Senior Managing Director George Dai discusses the role of digital advertising in today's modern media landscape and the possible opportunities it may present to investors.
"With the advent of innovative peer-to-peer transfer technologies, cashless payment platforms are growing rapidly." In our latest podcast, Alger Senior Analyst Darryl Ah Now discusses virtual banking, the "underbanked population", and how innovation is transforming the cashless payment landscape.
"Generally, people are overconfident when they make forecasts and inexperienced analysts may be less skeptical than they should be." In our latest podcast, Director of Market Strategy Brad Neuman discusses his latest white paper, "Looking Outside for Better Decisions".
In this podcast, Weatherbie Capital Senior Managing Director and Director of Research, Josh Bennett discusses how the strategy evolved over time to focus on exactly 50 stocks.