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Sharing current views and opinions showcases the thought leadership we bring to our clients.

Current Views

The Pursuit of Growth

Thoughts from our Domestic Equity Team

The financial markets are showing signs that companies are feeling optimistic about the direction of the economy. Indeed, a leading survey of companies seeking to measure confidence in the economy recently hit almost an 8-year high[1].

Among the signals we follow are mergers and acquisition activity (M&A) as well business investment in infrastructure (capital expenditures, or capex). We believe that an upswing in either of these measures demonstrates that companies are looking to grow their businesses with the belief that the economy is picking-up.

M&A activity year-to-date has been quite robust. Even with over a month left in the second quarter, global M&A volume in the first half of 2014 has been higher than any first half since the credit crisis ended[2]. Large cap U.S. firms, armed with large cash balances and access to inexpensive financing, have generally led this global M&A wave by acquiring other large cap companies[3].

As noted above, another way to increase exposure to a growing economy is to reinvest in the existing business by increasing capex. Ultimately, we think companies will engage in a meaningful amount of both M&A and capex. We view this wave of M&A activity as a positive sign that a significant increase in capex may soon follow.

Submitted by: Lee Caleshu, CFA

[1] International Strategy & Investment, “Company Survey Report”, May 2, 2014, pg. 1
[2] Bloomberg, The Roosevelt Investment Group
[3] Bloomberg, The Roosevelt Investment Group

This information is intended solely to report on investment strategies and opportunities identified by Roosevelt. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. References to specific securities and their issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. Please contact us at 646-452-6700 if there is any change in your financial situation, needs, goals or objectives, or if you wish to initiate any restrictions on the management of the account or modify existing restrictions, or if you would like to request a copy of our Code of Ethics. Our current disclosure statement is set forth on our Form ADV Part II, available for your review upon request, and on our website, www.rooseveltinvestments.com.

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The Roosevelt Investment Group, Inc. is an independent investment management firm that is not affiliated with any parent organization. The Roosevelt Investment Group, Inc. manages domestic equity, international equity, domestic fixed income, global fixed income, and balanced assets for primarily U.S. clients. The Roosevelt Investment Group, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission and notice filed in all 50 states.

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