As artificial intelligence (AI) emerged as a boon for those willing to step into unknown territory in 2023, Anthony Kingsley, CIO of Findlay Park, has been working to bring the success of the technology across to the Findlay Park American fund through less obvious and risky markets.
Kingsley holds strong conviction in the information technology sector, making up almost a quarter of the Findlay Park American fund, and reinforced by a top holding of 6.1% in Microsoft, as of November 2023. However, Kingsley believes the fund’s sixth-largest holding, research and consulting advice company Gartner, will also see significant benefits from the advancements of AI despite its less direct link.
“If you look at the kind of landscape companies need to navigate, we feel they are going to need help and advice,” Kingsley said. “So when they adopt AI, they will need the software to work with their existing technology stack.”
See also: Why Blue Whale’s Stephen Yiu rebought Meta in 2023
Gartner has increased its share price by around 30% in 2023 to the start of this year. The company’s revenue hit $1.4bn (£1.1bn) for the three months leading up to 30 September 2023, a 5.8% increase from 2022.
“We think Gartner will continue to grow over time somewhere in the teens for revenue growth, with attractive margins and good free cashflow, so that it can reinvest in the business or return to shareholders,” Kingsley said.
“We added to the stock earlier this year when it was trading at about 18 times forward earnings. It continues to generate good results and demonstrate that at a time of change, its tech services are in high demand.”
When asked if there was concern of a downfall in the stock following a boom in the AI sector, Kingsley said he believed the detachment of companies within the service industry rather than purely AI-focused ones would act as protection from a certain level of volatility.
To read more from Findlay Park as well as Sanford DeLand on Rightmove and Invesco on industry faithfuls, go to the January issue of the Portfolio Adviser magazine
