Macrovue’s High Quality Vue is a concentrated portfolio of ten high quality global companies that have a long history (10 years or more) of substantial dividend growth.
Every quarter our Investment team conducts a thorough review of this portfolio, taking into account recent earnings and related news flow, and provides our investors with an update on its performance and any changes made to the Vue.
Macrovue’s High Quality Vue has had a good twelve months, returning +15.12% (up to 30 April 2018). In comparison, the ASX 200 returned +5.46% while the MSCI All Country World Index gained +13.70% (in AUD).
Top three contributors to performance were:
- Microsoft Corp. (NASDAQ:MSFT): +29.98%
- Polaris Industries Inc. (NYSE:PII): +24.75%
- Novo Nordisk A/S Sponsored ADR Class B (NYSE:NVO): +23.71%
Top 3 high-quality shares over the past 12 months
Polaris Industries Inc. (NYSE:PII)
Industry channel checks by analysts are painting a positive picture for off-road recreational vehicles (ORV) suggesting that North America ORV retail growth in 1Q FY2018 will be low to mid-single digits.
PII has been strongly promoting its new product line up vs competitors’ promotions. Polaris could see additional tailwinds this year as the benefits from a full quarter of new product introductions (eg. RS1, RZR Turbo XP S, RZR 170) and better inventory availability continue.
The company’s low-single digit to mid-single digit top line ORV guidance made in Q4 2017 is probably a good retail proxy for the year but weather will negatively impact snowmobile sales in 1Q FY2018 and inventory levels for the category are likely high.
Polaris retains the position as the dominant leader with largest market share in North America powersports, significantly ahead of other players like Honda, Harley Davidson or Yamaha.
Novo Nordisk A/S Sponsored ADR Class B (NYSE:NVO)
While insulin is Novo Nordisk’s core business, it recently announced that it has obtained an exclusive worldwide licence to EpiDestiny's sickle cell disease (SCD) programme, EPI01. EpiDestiny will receive more than US$400 million in upfront development and sales milestone payments and will get royalties on net sales.
EpiDestiny and Novo Nordisk will then collaborate to develop EPI01 in Sickle Cell disease (SCD) and beta-thalassaemia. EpiDestiny has been granted Rare Pediatric Disease, Fast Track and Orphan Designations by the U.S. Food and Drug Administration (FDA) for EPI01.
While related to Novo’s existing biopharmaceutical business this represents a totally new therapeutic area for the company.
Sickle cell disease (SCD), is among the most common inherited diseases affecting mostly people of African and Asian origin, with an estimated 30 million cases worldwide.
SCD is caused by mutations in the gene for the haemoglobin beta chain that carries oxygen in red blood cells. Beta-thalassaemia is a related group of red blood cell diseases, arising in human evolution because of malaria, and also caused by mutations in the gene for the haemoglobin beta chain.
Microsoft Inc. (NASDAQ:MSFT)
Microsoft intends to become a dominant player in the “cloud” and is shifting away from legacy software models. That’s a good thing.
The so called “Hybrid” cloud, which mixes legacy and public-cloud infrastructure, is a big opportunity for the company and should become a major sales driver.
Microsoft's large installed base of Windows and Office subscribers are likely to give it an edge, as corporate users shift newer workloads to the cloud. Acceleration in Azure (MSFT’s cloud business) and server-product growth rates seen in 2Q FY2018 illustrate an improving enterprise-tech spending environment, which should drive revenue gains in 2018.
In the most recent quarter, Azure sales grew 98% in constant-currency terms, with premium services increasing in triple digits. The early-adoption rate of Microsoft's new hybrid cloud product, Azure Stack, is encouraging and will likely become a major growth driver next year.
Sales of cloud-based products remain the primary driver of Microsoft revenue, which should fuel growth despite a slowing in its Personal Computing segment although renewal cycles and upgrades in the consumer PC market may continue to boost sales in the short term.
The company's cloud-computing platform, Azure, continues to post almost triple-digit growth, helping the annualised run rate of commercial cloud surpass US$20 billion.
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