Connect with us

News

A bird in hand is worth two in the bush

Published

on

0227101_M_O_Connor_1000x600.jpg

By Michael O’Connor

Inflation was already at its highest level in four decades before war broke out between two countries that are vital to the global supply chain.

This unrest has undoubtedly impacted any transient outlook for inflation over the short term, putting further pressure on the Fed to take immediate action to tackle inflation.

As hopes for a ceasefire fade and a war of attrition unfolds, these inflationary pressures look set to remain, increasing the likelihood of a policy misstep by the Fed.

While the probability of a recession has increased over Q1, the strength of the US household balance sheet and company profit margins make it difficult to be ultra-bearish.

If we do experience an economic contraction, it will occur in the face of the strongest job markets on record, the highest corporate earnings since the 1950s and the most robust consumer balance sheet in history.

Labour Market Strength

Despite the surge in unemployment following the pandemic, we are now essentially back to pre-pandemic unemployment levels.

More importantly, the pre-pandemic high for job openings in the US was 7.5 million. We're now sitting at more than 11 million job openings in the US.

US Unemployment Rate

US household net worth is now more than six times annual Gross Domestic Product (GDP), driven predominantly by rising asset prices, increased savings rates, federal support and wage growth. This household wealth can drive consumer demand and company profits into the future.

Corporate Earnings

S&P 500 earnings per share jumped 35% in 2021, making it the most profitable year for American corporations since 1950.

In every quarter of 2021, US corporations' overall profit margin remained above 13%; a level reached during only one previous quarter in the past 70 years.

While ultra-forgiving 2020 comparison stats lend themselves well to record-breaking year-over-year stats in 2021, the point remains - US companies boast resilient profit margins supported by a robust US consumer.

Where to Invest

Volatility is likely to remain as we enter into Q1 earnings season.

Netflix has already shown how unforgiving the market can be. Two disappointing earnings reports have resulted in two consecutive 20% declines as this previous market darling becomes the poster child of growth stock volatility.

Similar growth names are likely to come under continued pressure over the short term as interest rates rise, so don't attempt to catch the falling knife just yet.

'A bird in hand is worth two in the bush' explains the waning allure of growth stocks quite nicely. Simply put, as inflation eats into the value of money, investors look to companies with cash flow heavy balance sheets already in place instead of those promising these cash flows in the future.

Again, short-term equity exposure should be aimed toward companies that can pass on rising prices to consumers without disrupting their net margins. This trend has played out across higher inflationary periods in the past, namely the 1940s and the 1970s.

The Final Word

The market will remain choppy as investors digest the Russia/Ukraine war, high inflation, and a hawkish Fed but economic growth and earnings trends remain healthy. And if inflation can moderate over the year, assisted by higher base rates, it may allow the Fed to take its foot off the gas.

For the full market outlook, visit theislandinvestor.com.

Advertisement

News

Kerry coaches firm honoured with All-Ireland title

Published

on

By

Kerry Coaches named All-Ireland All-Star Bus & Coach Company of the Year 2025

Killarney-based Kerry Coaches has been named All-Ireland All-Star Bus & Coach Company of the Year 2025 by the All-Ireland Business Foundation. This recognition also marks Kerry Coaches’ second Business All-Star Accreditation, having received its first accolade in 2024.

Founded in 1957, Kerry Coaches has established itself as a leader in the Irish transport industry, known for its exceptional service and commitment to quality.  With a fleet of over 100 modern chauffeur vehicles, mini-buses and coaches the company provides a wide range of transport services, including corporate travel, executive golf transportation and bespoke tours throughout Ireland and Scotland.

 Speaking on the achievement, Mike Buckley, Director of Kerry Coaches, said:

“We are incredibly proud to receive this national recognition from the All-Ireland Business Foundation. It’s a true reflection of the dedication, professionalism, and passion shown by every member of our team. Our mission has always been to deliver exceptional travel experiences, and this award reaffirms our position as a leader in the industry.”

Announcing the news of Kerry Coaches’ achievement, Deputy Chair of AIBF’s Adjudication Board, Kieran Ring, said: “It is my pleasure to commend Kerry Coaches for its outstanding performance in achieving the Business All-Star accreditation. After a thorough review, the firm has been honoured with All-Ireland All-Star Bus & Coach Company Of The Year 2025. Kerry Coaches is distinguished not only for its superior fleet but also for its exceptional team, some of whom have been with the company for over 25 years. This seasoned team brings an extraordinary level of knowledge and expertise, ensuring that every client experience is exceptional.”         

Managing   Director   of   the   All-Ireland   Business   Foundation, Kapil   Khanna, said:  “The accreditation, which is now held by over 700 firms, is needed by the thousands of small and medium businesses which operate to their own standards but have nothing to measure them by.”

He   added: “We   evaluate   a   company’s   background, trustworthiness and performance, and we speak to customers, employees and vendors. We also anonymously approach the company as a customer and report back on the experience. The business goes through at least two interviews and is scored on every part of the process against set metrics.”

About The All-Ireland Business Foundation

The All-Ireland Business Foundation is an autonomous national accreditation body tasked with enterprise development and the promotion of Best-in-Class Irish businesses.

As the accreditation body for the Business All-Star mark, the AIBF recognises Best-In-Class Irish 

businesses.   Companies   that   merit   recognition   based   on   an   independent   audit   of   their performance, reputation, and customer-centricity.

Business All-Star Accreditation Is The Nation’s Symbol Of Trust. Currently, there are over 700 

companies that are accredited by AIBF. Since 2014, over 5000 companies have participated in their programmes.

Attachments

Continue Reading

News

Trainee Blacksmith forging a career at Muckross Traditional Farms

Published

on

By

Phillip Pestor-Young, a trainee blacksmith from County Kildare, is currently gaining experience under Master Blacksmith Tom Allison at Muckross Traditional Farms.

Pestor-Young is enrolled in the All-Ireland Heritage Skills Programme. This programme is a cross-border educational initiative by the King’s Foundation, The Heritage Council, and the Historic Environment Division in Northern Ireland. 

Prior to moving to Ireland in 2019, Phillip trained as an engineer and fabricator in the UK. He is now developing his blacksmithing skills in Kerry.

For more information on the program, visit https://kings-foundation.org/study/all-ireland-heritage-skills-programme/.

Continue Reading