Alliance Trust highlights three stocks from its globally diversified portfolio including Japan, the US, and across the construction, technology, & energy sectors.
First up is United Rentals, the largest equipment rental and management company in the world, with operations in 1,500 locations across North America, Europe, Australia, and New Zealand, serving customers across construction and industrial sectors. Andrew Wellington Co-founder and CIO, Lyrical Asset Management explains the United Rentals business model based on customers renting rather than buying specialist equipment that may be used infrequently and require extensive maintenance, thereby avoiding expensive outlays. “Amid complex projects, it ensures the right equipment is in the right place at the right time,” says Wellington. “Currently, the equipment rental industry is growing at a particularly fast clip, penetrating further into the equipment ownership market. The firm is attractively valued and growing its earnings at a much higher rate when compared to the wider S&P 500 market in which it is listed.”
Next in the diversified stock selection, Nvidia Corporation provides solutions for advanced computing and has become a household name on the back of excitement over artificial intelligence (AI) in recent years, as well as a member of the Magnificent 7 group of superstar US technology stocks. Brian Kersmanc, portfolio manager at GQG Partners says Nvidia’s offering crosses both the software and hardware divide: manufacturing graphics processing units (GPUs) or chips used to rapidly process the vast quantities of data used in applications such as AI and gaming, as well as supporting software elements such as platforms for training algorithms and cloud services. “As a result of an early call on AI, and their linear, end-to-end solutions for clients, the stock picker believes Nvidia has a dominant and entrenched competitive position and huge addressable market,” says Kersmanc.
Finally, a Japanese manufacturer of energy efficient, on demand hot water heaters and heat pumps, Rinnai sells its products in 79 countries across the world. Jamie Rosenwald, chief investment officer at Dalton Investments says: “Hot water can often be the bane of a large family’s existence, with traditional systems needing to use vast quantities of energy to heat large tanks for long periods to supply sufficient hot water when needed. Rinnai’s products superheat water when it is required, providing an on-demand solution that’s significantly more environmentally friendly. What’s more, the stock picker believes that, given the ubiquitous use of hot water showers around the globe, Rinnai’s addressable market potential is enormous, but also that the stock is trading at attractively cheap valuations.”
Alliance Trust aims to deliver long-term capital growth and rising income from investing in global equities at a competitive cost. Our investment manager blends the top stock selections of some of the world’s best active managers into a single diversified portfolio designed to outperform the market while carefully managing risk and volatility. Alliance Trust is an AIC Dividend Hero with 56 consecutive years of rising dividends.
