To gather as much information as possible it is important to read about the trends and changes our world is experiencing. This is St. Petri Capital’s take on relevant trends.
Green Energy Wave
The structural transition towards renewable energy
Climate action is needed to halt climate change and the transition towards net-zero demands alternatives contributing to this direction.
St. Petri Capital aims to pick transition front-runners contributing to the green transition and benefitting from the broadening gap in profitability, growth, and valuation from technological enablers to energy providers.
The structural change towards securing a sustainable future
Our environment is an exhaustible resource that drives the need for consuming our resources rationally. Therefore, our consumption today should not compromise the ability of future generations.
St. Petri Capital picks sustainable leaders in every sector differentiating themselves from peers by optimising and creating sustainable solutions contributing to a circular and ecological future.
Low Volatility Exuberance
The transition to a cycle with higher interest rates
Low-volatility stocks have been treated as bond proxies due to the low interest rate environment, which has led to exaggerated valuations not justified by fundamentals.
St. Petri Capital views the low interest environment as unsustainable and is short in low-volatility stocks with inflated valuations and debt dependent business models as they are expected to be negatively correlated with rising interest rates.
The transition to a cycle with higher inflation
The effort of containing climate change will be inflationary. The net-zero transition will demand corporations to switch to greener and more expensive alternatives. Furthermore, the demand for green technologies will drive demand and price of raw materials which will evidently be passed through to end products.
St. Petri Capital picks companies that will benefit from this change.
Online Retail Transition
The structural shift from physical retail to e-commerce
Integration of the physical and digital world is disrupting the retail industry. The paradigm shift is prevalent in multiple sectors, but at different penetration levels.
St. Petri Capital aims to pick digital front-runners pioneering the omnichannel shift.
Personal Health Care
The structural change of increased health awareness
People live longer and with ageing comes common health conditions. The Covid-19 pandemic showed how vulnerable we are to new diseases which combined with demographic trends is driving a more holistic notion of health.
St. Petri Capital invests in companies that strive to improve the health of the global population.
The structural change towards taking time offline
The internet is an integral part of our lives. As people are spending more time online, more are striving to take a break from it. By decreasing time spent in front of a screen people get the chance to do new things and unfold creatively.
St. Petri Capital picks stocks that benefit from this change and provide people with alternatives to screen time from painting tools to sailboats.
Disruption of traditional banking services
Digital transformation and democratization of the banking industry are challenging traditional banks whose business used to rely on regulation, capital requirements, and loyal customers. Instead, universal banks are challenged by players outside the traditional banking industry who provide innovative solutions leading to sector wide disruption
St. Petri Capital picks financial disruptors who offer superior solutions that are competitive on technology, ability, fees, and/or spreads.
Distribution to Decline
The structural shift from physical to digital communication and distribution
The declining usage of letters and physical mail, replaced by emails and other digital communication tools, challenges the large conventional postal services. The market for distribution of physical orders, consumer goods, and packages has seen an increasing rise in players and has become extremely competitive.
Digital Platform Dominance
The platform dominance is a double-edged sword
The rise of the digital platform business model has led to massive disruption of multiple industries. The superiority and importance of digital platforms are ever prevailing as they are changing how we work, do business, produce, move, learn, and socialize. The platform dominance has led to increased skepticism and regulation. of digital platform mastodons which we encourage as we believe these players must be held accountable.
St. Petri Capital believes the importance of digital platforms is ever increasing and aims to pick technological enablers and disrupters pioneering the digital platform economy, who do not infringe or abuse their market position to detriment consumers.
The increased direct and indirect demand of artificial intelligence
The technological advancements within AI and machine learning will affect almost every thinkable industry, improving data collection and analysis, streamlining operations, and disrupting value chains
St. Petri Capital seeks to identify companies that will benefit from or exploit the opportunities of the disruption AI presents.
Internet of Things
Moore’s law is increasingly pacing the structural change driven by the Internet of Things (IoT).
The ever increasing connectivity of all things is creating vast amounts of data, bringing disruptions in value chains across many industries. Companies that manage to collect, analyze and act based on the available data will prosper and companies that don’t will suffer.
St. Petri Capital identifies companies that will indirectly benefit/suffer from IoT as well as companies creating new business models based on IoT.
Structural change towards the digital space as a parallel reality
The digital experience is rapidly improving, with the introduction of new technologies and the development of platforms bringing the metaverse closer to reality. We believe that technological advancement within VR and AR will disrupt different industries. An example is the gaming industry, which we believe will be disrupted as the development of VR products completely alter the user experience.
St Petri Capital aims to pick pioneers who develop, supply, or demand the technology promoting this change.
Real Income Destruction
The structural implications of higher inflation and interest rates
The past two decades have been characterised by low inflation and low interest rates. The structural shift towards higher inflation and interest rates will hurt consumer sentiment- and consumption globally.
St. Petri believes this paradigm shift will have long term implications for corporate earnings and we aim to pick stocks highly exposed to this change in consumer demand.
The transition to a cycle of increased security investments
The Russian invasion of Ukraine marked a paradigm shift in Europe. The new reality, rising security concerns and growing international tensions will make national security investments a top priority for the European countries in years to come.
This paradigm shift will mark a time of more government intervention, increased defense spending, energy diversification, information security and increased protectionism.
St. Petri Capital aims to pick leaders and pioneers who will benefit from, contribute to, and promote a secure future.