Sanlam Private Wealth on global stocks to watch

Sanlam Private Wealth's Chief Investment Officer, David Lerche, recently shared insights on three interesting and fast-growing businesses listed in the U.S. during an interview with CNBC Africa. Lerche emphasized the importance of evaluating businesses and being prepared to act quickly when opportunities arise in the market. He highlighted the significance of identifying businesses that show promise for long-term growth and value for investors. Lerche discussed three specific companies that have caught the attention of Sanlam Private Wealth: DECA Brands, Arista Networks, and Deer & Company. DECA Brands, known for its ownership of Hoka Footwear and Uggs Footwear, impressed Lerche with its clean and simple business model, strong growth track record, and solid returns on equity. Although the valuation may not be attractive at the moment, Lerche acknowledged the company's impressive share price performance compared to its peers over the past years. When it comes to earnings, Sanlam Private Wealth will focus on the performance of DECA Brands in the upcoming winter season to assess future growth potential. Moving on to Arista Networks, Lerche highlighted the company's role in providing cloud networking solutions and its positioning within the technology sector. He likened companies like Arista Networks to 'picks and shovels' businesses in the tech industry, essential components for future innovations in AI. While Arista Networks currently trades at a forward P/E multiple of 40, Lerche believes a reevaluation may occur if the price aligns with the expected growth and margins of the business. Deer & Company, an agricultural equipment maker, also piqued Lerche's interest due to its evolving quality as a cyclical business. He noted the company's improved return on equity and cyclical nature as factors for consideration. As the company prepares to announce earnings, Sanlam Private Wealth anticipates analyzing the cyclicality of the business and potential market responses to make informed investment decisions. Lerche emphasized the importance of identifying quality businesses with growth potential and favorable valuations for long-term investment success. The team at Sanlam Private Wealth remains vigilant in monitoring market trends and identifying opportunities for their clients' portfolios.