3 Sustainable Stock Picks

VIDEO: Liontrust's Simon Clements looks at opportunities in technology, robotics and corporate creches - all with a sustainable theme

Holly Black 8 April, 2021 | 11:22AM
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Holly Black: Welcome to Morningstar's 3 Stock Picks. I'm Holly Black. With me is Simon Clements. He is Manager of the Liontrust Sustainable Future Global Growth Fund. Hello.

Simon Clements: Good morning. How are you?

Black: I'm good. So, you're going to talk us through three stocks in the portfolio that you're feeling very positive on. Where would you like to start?

Clements: Yeah. Well, why don't we start with Autodesk (ADSK), which is a company that comes under our improving industrial and agricultural processes theme. It's an area we're really excited about because it services the construction industry and the construction industry is just one that we feel is quite inefficient. And Autodesk has technology which really helps improve these areas. So, on a building site now instead of having pieces of paper from the architect, you'll have iPads and you will have real-time information. And it's significantly improving the way that that industry works. And the fact that it's so early in its adoption phase, we think it's really exciting and the fact that it's going to save such significant amounts of important resources really is a good fit for our process.

Black: And some of that seems so simple, doesn't it, just not taking piles of paper to a building site. Seems quite obvious when you say it, but it's amazing how long it actually takes for the change to happen.

Clements: Yeah, I mean, the truth is that some areas of the economy – some people just are later to accept technology and that's just how it is. And traditionally, things have been done with pen and paper and on spreadsheets. And now, you have these exciting technologies that we use, things like cloud computing and data analytics and two-way flow of information. So, yeah, we think it's a really exciting area.

Black: Okay. What's stock number two?

Clements: Stock number two is Intuitive Surgical (ISRG), which is another really exciting technology and what they do is that they are the kind of global leader in robotic surgeries. So, they really replace traditional surgeons. Instead of having to stand over and do the surgery manually themselves, which takes hours and is very demanding and also is more likely to incur errors, we're absolutely making something wrong in the body and the incisions within the body are much larger. Robotic surgery is much more exact. So, it benefits everybody, particularly patients who are more likely to have a surgery that goes well, less time in hospital, benefits the hospitals because they get people in and out which they want and actually benefits the surgeons.

Black: Okay. And what is our final stock today?

Clements: Yeah. The final stock is a company called Bright Horizons (BHA). It's a US-based company. They actually have some centers over here. So, it's early year childcare, the corporate childcare which we think is really important and it just allows people the flexibility to continue their careers, particularly helpful – often it's – it's more often women than men who also benefit from that. So, that helps to women in senior roles, which we think is hugely important obviously for diversity, and also just for mental health, which we think is really important. And the stats show that people who use Bright Horizons tend to be less stressed, they tend to have much higher work satisfaction, satisfaction at work, work-life balance knowing that you can still work, still be a parent and knowing that your child is in the right hands, we think it's really important.

Black: But how has that company fared in the last year when so many people have been banned from going to the office in lockdowns?

Clements: Yeah, I mean, it has struggled. But it's a really interesting company. And I don't want to get too much into the weeds, but they have a second business which is called Back-Up Care where they actually send the teachers around to your house. So, it's been a really – they've been able to supplement the fact that no one is coming into work with the fact that this has been hugely popular and obviously really beneficial too for the companies and for the workers because we've all had to kind of dig in and do what we must do to kind of get through and keep on going. And I think for a lot of people who used this service, it's been hugely popular and a huge success.

Black: Fantastic. Simon, thank you so much for your time. For Morningstar, I'm Holly Black.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Holly Black  is Senior Editor, Morningstar.co.uk


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