A New Approach to Risk Management
HEICO Corporation, which provides aircraft parts, is benefiting from an increase in air travel, but we believe the company’s strong commitment to research and development has positioned it to continue its sales and earnings growth momentum throughout economic cycles.
Innovation Is Transforming Health Care Insulet Corporation has developed Omnipod, a tubeless insulin system for treating diabetes. It is a wearable and waterproof pod that delivers insulin for up to 72 hours. Insulet is also expanding the types of drugs that can be administered with Omnipod. For diabetes patients, Omnipod is a more convenient option than administering insulin with syringes, which can require keeping the medication on hand around the clock. The device can also deliver more accurate dosages at a steady rate, which improves treatment efficacy. These attributes, we believe, can potentially support growing demand for Omnipod throughout economic cycles. Public Safety Gets a Boost from Digitization Government agencies and employers need to respond promptly to weather emergencies, infrastructure failures, civil unrest, health threats and other events. To that end, Everbridge, Inc. offers cloud-based technology for disseminating alerts via text messages, emails, telephone voice messages and the web, including social media. Its technology also helps governments and employers better manage crises, including deploying and coordinating first responders. By providing innovative products that help governments and employers better respond to events, we believe Everbridge has potential to continue increasing its sales and produce earnings expansion. Research and Development Thrives in Aviation HEICO Corporation, which provides aircraft parts, is benefiting from an increase in air travel, but we believe the company’s strong commitment to research and development has positioned it to continue its sales and earnings growth momentum throughout economic cycles. The company specializes in private manufacturer authorization parts that replace original equipment manufacturer parts. It sells parts at substantially lower prices than original manufacturers. It has considerable resources such as engineers and testing equipment for developing replacement parts that meet strict Federal Aviation Administration requirements. Conclusion Identifying smaller high-quality companies that are leaders in secular growth trends requires in-depth fundamental research. Such a process, we believe, can potentially identify companies that will generate attractive returns for investors throughout economic cycles. At the same time, having an in-depth knowledge of portfolio holdings and unique characteristics that can allow each company to grow its earnings is crucial to managing portfolio risk.
Matt Weatherbie, CFA Chief Executive Officer Co-Chief Investment Officer
Joshua D. Bennett, CFA Senior Managing Director Director of Research
H. George Dai, Ph.D. Senior Managing Director Co-Chief Investment Officer
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