Luxembourg (www.fondscheck.de) – A difficult stock market year is behind us. It’s time to take stock – and look to the future, says Anders Tandberg-Johansen, portfolio manager on the team at the DNB Technology Fund (ISIN LU0302296495 / WKN A0MWAN), which has enjoyed success for over 20 years. years, at DNB Asset Management.
With a drop of 36%, the interactive media and entertainment sector proved to be the weakest sector in the experts’ investment universe. Finally, stocks such as Google, Facebook and Snap have contributed. Telecommunications services would have done better with an increase of a good two percent. With a price/earnings ratio (P/E) of eleven based on earnings estimates for the next twelve months, this sector is currently the most favorably valued. Deutsche Telekom is still in the portfolio. It’s a bet on American business, which is developing very well. Moreover, the P/E is less than four.
At the same time, it’s hard to get excited about telecom services, according to experts at DNB Asset Management. Outside of Deutsche Telekom, it’s hard to see where future growth can be generated. Moreover, the European market in particular is very fragmented and requires consolidation. The Vodafone boss was recently fired. This is not a very positive signal – especially considering that the group is in the process of acquiring Three UK. In the eyes of experts, this sector risks being one of the losers in the coming year.
Experts continue to see the gaming sector as particularly promising. Although it has fallen by 7% this year, it is expected to increase by 9% in 2023 and 6% in 2024. Despite attractive growth prospects, shares in the sector have suffered losses in the post-Corona period. The industry has now returned to a level that opens up exciting opportunities.
Big tech names such as Google, Meta, Amazon & Co would have been among the biggest winners from the corona crisis, but would have lost a lot of feathers during the growth-to-value spin. Now things are normalizing again and some of these titles are very cheap, so to speak. We are in a very interesting situation because these companies are investing heavily in the Metaverse but also in artificial intelligence, according to the experts at DNB Asset Management. In this context, Meta, formerly Facebook, could become a leading stock.
Artificial intelligence is one of the sub-sectors that are still in the early stages of growth. An example is the GPT-3 text generator, which can even imitate Shakespeare, write program code, and translate foreign languages and legal paragraphs. For example, you can ask the computer to write an essay or a letter.
Artificial intelligence has also changed the music industry. Classical music, for example, composed using algorithms, is just one example among many. AI is also progressing in ophthalmic optics. Here, AI allows blind people to “see” again through software. Meta has invested $30 billion in this technology. Google is also likely to play a big role in artificial intelligence, which is currently priced at a P/E of 18. Even a recession, which is likely to be painful for the tech giant, is unlikely to change the outlook. good long-term prospects. After that, however, they might present themselves even more strongly.
When investing, experts would favor scalable business models with proven profitability, strong balance sheets, strong cash flows and modest valuations. More recently, they bought Google’s parent company, Alphabet, thanks to its favorable earnings multiple and because it lags the overall market. In addition, the experts strengthened their positions at Meta and the British media group ITV. At the end of November, the DNB Technology Fund (ISIN LU0302296495 / WKN A0MWAN) had outperformed its benchmark MSCI Communications Services & IT index by 10.2 percentage points, despite the drop in technology stocks with a minus of 9%. (03.01.2023/fc/a/f)