A Closer Look at Healthcare and Industrials

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Danton Goei:
Obviously healthcare is big beneficiary of demographics

We know that there's aging in the population, not just in the US but globally, and healthcare certainly a global industry

We prefer in general service companies, they just don't have the same one drug risk that you seen in a lot of the pharma and biotechs, and generics are also. There is more of a scale business rather than a specific single drug that's a driver. That can be great if you hit on it, but obviously there's a lot of risk there. We know that all these patents have an expiration as well, so no matter how great a drug you find, there is a life on it

That's generally, and then some of the names that we own, Viatris, which is a generic manufacturer with some branded drugs as well, trading at a very low valuation as Chris will talk about later on. Quest Diagnostics, which is one of the leading US lab companies. Then Cigna, which is one of also the leading healthcare, managed care companies.

Chris Davis:
Why don't I jump in, just take industrials. These are often classic, value type names. We talked about that resilient, non-linear growth reiterated here, and that focus, we love to have the tailwinds, so things like a focus on electrification or energy efficient, that for us has been a resilient way to play some of these changes. These macro trends that get people excited, here are beneficiaries of that. Whether it's Teck Resources, one of the leading global copper companies, Berkshire of course, which has enormous industrial businesses in the railroad and so on, or Owens Corning, where it's about the best investment a homeowner can make is just insulating their home, and that's a nice retrofit, high RRR investment for homeowners, and Owens Corning is very well positioned for that. So classic example, the names that we have.

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