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Written by the Mackenzie Growth Team
It seems to us that the market remains optimistic about the economic cycle. We don’t think we can forecast the future of the economy. But when the market appears optimistic in our experience it is wise to consider being more pessimistic.
In general, we are keeping our cyclical exposure low, while selling or trimming cyclicals that have done well in the market and adding some that have already been going through a downturn – Generac is a good example of a company we have been buying.
There are some highly weighted companies that are having a good year so far in 2024 – these include Cirrus Logic in semiconductors, Commvault in backup and recovery software, Parsons in consulting and Wabtec in railroad equipment.
Last week the team attended a conference at which many of our companies were present. Among them was PowerSchool, an education software company. From our meeting with the company at the conference, it was clear that the move of school budgets to increased spending on technology continues. Of note is the fact that the company has introduced its Power Buddy line of AI-based products to the marketplace, and these are being well-received. The Power Buddy products take advantage of data the company already has, a key element that we have been focused on in general in our company holdings.
After the conference it was announced that PowerSchool will be acquired by Bain for cash for $5.6 billion. As a one of the company’s large shareholders, our Small-Mid Cap Growth Fund will benefit from this transaction, which is being done at levels that are close to where our model sits.
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