Ollie Smith: Well, it's been a while, but we're back with another "3 Stock Picks" video and it's with the manager of a Morningstar 5-Star rated fund. Alistair Wittet runs the Comgest Growth Europe ex UK Fund. He joins me now.
Alistair, what are the three stock picks at the heart of your strategy? What's the first?
Alistair Wittet: So, I want to just start off by talking about Novo Nordisk. Novo Nordisk is the leader in diabetes care. It's built that lead over many, many years of strong R&D investment. And the reason we're particularly positive on Novo Nordisk at the moment is not just its core diabetes franchise, which has continued to grow thanks to a new product they launched a number of years ago called GLP-1, but more importantly, for the company in the coming years is the fact that they've managed to have this drug approved GLP-1 for the obesity setting as well. And obesity is one of the biggest costs to healthcare systems globally. In the UK, for example, NICE estimated it costs the UK healthcare system £6 billion directly, and over £20 billion indirectly. So, this is a massive priority for the healthcare system. And Novo Nordisk with the approval of this novel product in the obesity setting, we believe, has very strong growth in the years to come.
OS: Fantastic. And what's the second? Are we talking about Hermes now?
AW: So, in a very different space, Hermes, the luxury goods giant, again, a company that we're very positive on for the years to come, including, and this may come as a surprise, in the event of a recession in 2023, which is of course something that people are talking about. And why are we so positive on Hermes? It's because this is one of the few companies where you really don't talk about demand; you talk about supply. If the company beats expectations, it's because they were able to supply more bags than people expected, and if they missed expectations because they supplied fewer bags. And the reason that they are so much more dependent on supply than demand is because they structurally undersupply the market, and that is also what's going to protect them in the case of a potential recession next year because the structural undersupply of the market means that even as demand weakens, they will still be able to generate growth, in our view.
OS: Fantastic. And then, finally, I believe we're moving on to Straumann.
AW: Yes, so back into the healthcare space, Straumann, the dental implant leader, a company which built its leadership in the premium implant space. And one of the reasons that we're quite positive on Straumann next year and in the years to come is because of the idiosyncratic nature of the company's growth. The company has launched having been leaders in the premium space have moved into the discounting plant space. They've moved into the CADCAM space, so scanners used to scan your mouth, and more recently, they're moving into the clear aligner space, so these are the clear see-through braces that people are increasingly using. And the company is able to roll these products out to its existing dental network where it has very strong relationships, and we believe that will create a degree of visibility to their growth, which is quite rare.
OS: Sure. Thank you very, very much, Alistair. For more on his take on upcoming developments in 2023, check out a follow-up video we'll be releasing next week as part of our special report on the upcoming year. Until then, my thanks to you, Alistair. I've been Ollie Smith for Morningstar.
