As part of today’s installment of Good Buy or Goodbye, Thornburg Investment Management portfolio manager Emily Leveille joins Julie Hyman to highlight two of her stock trades: buy IT company Globant (GLOB), avoid luxury retail brand LVMH (MC.PA).
Leveille has found Globant to be a major beneficiary of the growing AI trade in 2024, attributing its information technology (IT) business dealings with Disney’s streaming platforms (DIS) as a major boost to Globant’s business.
"We like Globant because we think Globant and IT services businesses in general are a key enabler of AI transformation at an enterprise level," Leveille tells Yahoo Finance, adding: "We think the downside is pretty de-risked given you’re also starting to see a recovery in spend in cloud services in the non-AI part of the business. So you had big digital transformation during COVID. They were a big beneficiary, then you had a little bit of a hangover where spend in digital transformation slowed. Now, you’re starting to see signs of a recovery."
Turning her attention to the fashion industry, Leveille views post-pandemic consumer pullbacks in the US and China’s retail markets to be taking a toll on the Dior and Louis Vuitton parent company LVMH. She names LVMH’s prices on its premier brands to be a major deterrent in retaining customers.
"In China, they actually saw their consumer base shrink for the first time. And you know, I think you’ve seen a similar dynamic here where maybe somebody graduated from college, they got a new job, they got a great bonus. They went to buy a handbag. But, Louis Vuitton raised prices and the whole luxury industry raised prices pretty significantly," Leveille says.
"So I think that they need to provide a consumer with the consumer needs to adjust that entry level price might be a little bit too high. Now for your new buyer. And that’s really you know, that’s really how you cultivate that customer journey… I think they’re going to have to adjust."
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