CSL’s numbers were fine. It is a fearsomely expensive, superb quality company doing what it normally does, recovering from its own slightly unique set of COVID related supply chain issues.
Those supply chain issues were mainly related to pandemic unemployment benefits reducing paid-for plasma donators in the US, as well as border issues with Mexico also regarding the flow of donors, which now appears be back on track for FY22, which will increase plasma volumes in FY23 (there’s a lead time of about 18 months).
For us, it is the sizeable factor loading to quality that we are after (below, the Fama French factor premia correlates)…
…and the offshore dollar earnings.
The stock specific narrative (novel therapeutics, unmet clinical needs, aging populations) is unchanged.
Our exposure is fractionally above benchmark, it isn’t an “alpha” trade, but rather the above macro factor hedges, and index construction purposes, that define most of the trade, and we periodically oscillate above or below benchmark weight depending on relative performance.
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