BNY Mellon Investment Manager Says Opportunities Exist Despite Slow Growth Environment
NEW YORK and LONDON, January 17, 2013 — Construction, growing energy production in the U.S., cutting-edge technology, the changing health-care landscape and increasing merger-and-acquisition activity are likely to provide investment opportunities during 2013, according to a white paper from The Boston Company Asset Management, the Boston-based equities investor for BNY Mellon.
In the paper, The Boston Company's U.S. Small Cap Growth team concludes that investment opportunities will exist despite the continuing low-return environment. "In a low-interest rate environment, investors likely will be willing to pay for companies that can deliver growth," according to the paper, Investment Themes for 2013.
Beneficiaries of the low rates will be the housing industry as well as the construction industry across both residential and non-residential markets, the report said. On the other hand, the report said banks will continue to feel pressure from low rates that have compressed net interest margins.
On energy, The Boston Company pointed to advances in drilling technology that have led to increases in oil and natural gas production.
"We are investing in companies that benefit from the growing volume of hydrocarbon being extracted in the U.S., but are looking to avoid those that would be adversely affected if commodity prices moderate over time," said B. Randall Watts, Jr., lead portfolio manager for the Small Cap Growth team. "We like the companies that supply equipment and services to this industry, such as pipelines, processing plants and storage."
In technology, The Boston Company said it favors companies that help carriers improve wireless service and facilitate offerings accessed through smartphones. In health care, The Boston Company expects to find opportunities in biotech, specialty pharmaceuticals, Medicaid managed care and selected health care services.
Merger-and-acquisition activities, which The Boston Company expects to accelerate in 2013, could provide opportunities for investors, the report said. "As uncertainties surrounding the U.S. elections and fiscal cliff dissipate and the eurozone makes headway in resolving its debt crisis, companies may become more confident about putting their capital to work," the report said.
Watts added, "With continuing low interest rates, there is less incentive for companies to hoard cash. So companies with healthy balance sheets are more likely to acquire market share, talent, intellectual property and new products."
The Boston Company Asset Management, LLC, a BNY Mellon Investment Management boutique, provides investment management services for corporate, public, mutual funds and union sponsored and jointly trusteed retirement plans, endowments and foundations.
BNY Mellon Investment Management is one of the world's leading investment management organizations and one of the top U.S. wealth managers, with $1.4 trillion in assets under management. It encompasses BNY Mellon's affiliated investment management firms, wealth management services and global distribution companies. More information can be found at www.bnymellon.com.
BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team. It has $26.7 trillion in assets under custody/administration and $1.4 trillion in assets under management, services $11.4 trillion in outstanding debt and processes global payments averaging $1.5 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com or follow us on Twitter @BNYMellon.
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