Entry Points | Breaking Down the Global Supply Chain

Brandon Smith, CFA, CAIA, Portfolio Analyst at Boston Partners highlights inflation risks and other trends that are currently shaping the opportunity set for long/short strategies. For questions or additional information, please contact us.
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Value Strategies to Turn Supply Chain Challenges into Opportunity

Catalysts in Play: The Covid-19 pandemic has wreaked havoc on global supply chains. The pressures may have peaked, at least temporarily, but ongoing labor shortages continue to hinder the transportation and logistics industries. Moreover, the shift in consumer spending – from services to goods – is only exerting more pressure on fragile and lean supply chains.

The impact can be felt across the economy. The Consumer Durables and Consumer Staples sectors, however, stand out as among the hardest hit, as supply shortages and inflationary pressures restrain revenue growth, while added logistics expenses weigh on margins.

Entry Points:  

Despite the headwinds, opportunities are now surfacing that will create winners both directly, from the supply chain challenges, as well as indirectly, as consumers and other industries cope with the new reality.

Freight Forwarding / Logistics: Among the direct beneficiaries, for instance, are the freight forwarding operators. Beyond just the tailwinds taking form to solve the supply chain gaps, the larger players in this segment benefit from economies of scale and should be able add to their market share through their geographic reach and reliability.

Auto Parts Retailers: One of the most exposed areas to the supply chain crisis has been the auto manufacturers. As the availability of new cars has been squeezed the average age of automobiles on the road has grown. This is benefitting the auto parts manufacturers and retailers serving the used car market and playing a key role to meet the surging demand for replacement parts. By the same token, auto parts manufacturers supplying the original equipment manufacturers (OEMs) are exposed to the ongoing production cuts.

Active Strategy:  

To identify the prospective winners and losers in these and other segments, we believe a combination of fundamental and quantitative techniques can identify the names best positioned for sustained revenue and earnings performance and may have catalysts in place for future growth. Given the turbulence created, mispricing opportunities abound.

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Boston Partners Global Investors, Inc. (“Boston Partners”) is an investment adviser registered with the SEC under the Investment Advisers Act of 1940. Registration does not imply a certain level of skill or training. The views expressed in this commentary reflect those of the author as of the date of this commentary. Any such views are subject to change at any time based on market and other conditions and Boston Partners disclaims any responsibility to update such views. Past performance is not an indication of future results. Discussions of securities, market returns, and trends are not intended to be a forecast of future events or returns.

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Matthew Donovan

Equity Analyst

Mr. Donovan holds a B.A. in Economics from the University of Pennsylvania.

Mr. Donovan is an equity analyst with Boston Partners. Mr. Donovan is focusing his analytical efforts on Emerging Markets equities. Prior to this, he was a Research Analyst for the Boston Partners Sustainability and Engagement Team. He was responsible for original ESG/Sustainability research on companies held in Boston Partners’ portfolios. Mr. Donovan holds a B.A. in Economics from the University of Pennsylvania. He has one year of experience.

John Zhao

Equity Analyst

Mr. Zhao holds a Bachelor of Arts degree from the Richard Ivey School of Business at Western University and an MBA from Harvard Business School. He has six years of industry experience.

Mr. Zhao is an emerging markets industry analyst with Boston Partners specializing in fundamental research of stocks held in our Emerging Markets Equity products. Prior to his role at Boston Partners, Mr. Zhao worked as a Private Equity Associate in Salt Lake City and an Investment Banking Associate in Hong Kong.

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Jonah Frank

Equity Analyst

Mr. Frank was a student at Boston University where he earned a B.S. degree in business administration with a concentration in finance and management information systems.

Mr. Frank is an equity research analyst with Boston Partners. Mr. Frank is focusing his analytical efforts on equities within a variety of cyclical industries.

Edward Stansky

Equity Analyst

Mr. Stansky holds a B.S. degree in economics from Duke University and a M.B.A. from NYU’s Stern School of Business. He has six years of investment experience.

Mr. Stansky is an equity research analyst with Boston Partners and has generalist coverage responsibilities. Prior to this role, he worked as a high yield and leveraged loan analyst at DDJ Capital and as an investment banking analyst in debt advisory at BofA Merrill Lynch.

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Marlon Thompson

Equity Trading Assistant

Mr. Thompson holds a B.S. degree in finance from Boston College. He has ten years of industry experience.

Mr. Thompson is an equity trading assistant for Boston Partners. Prior to assuming this role, he worked as a portfolio operations analyst. Before joining the firm, Mr. Thompson held several roles including Vice President of Operations at Benefit Street Partners LLC and positions at International Fund Services (IFS) and Pioneer Investments.

Kara Pattipati, CFA

Relationship Manager

Ms. Pattipati holds an M.A. in International Relations from the University of St. Andrews. She holds the Chartered Financial Analyst® designation. Ms. Pattipati has ten years of industry experience.

Ms. Pattipati is a member of the Relationship Management team at Boston Partners. She works with many of our key domestic and international clients in a client service and relationship manager capacity. Prior to joining Boston Partners in 2016, she was a business development associate at Geode Capital Management.

Elizabeth Sheerin

Relationship Manager

Ms. Sheerin holds a B.S. degree in business management from Babson College. Ms. Sheerin has thirteen years of industry experience

Ms. Sheerin is a member of the Relationship Management team at Boston Partners and she joined this team in 2011.  She works with many of our key domestic and international clients in a client service and relationship manager capacity. Prior to joining our firm, she was a Client Service Representative at Putnam Investments. She also held several financial services related internships including working for Merrill Lynch Global Wealth Management and State Street Global Advisors.

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