ILMA Compoundings April 2017 - 38

INDUSTRIALS
Considerable outlays on industrial
equipment need to occur to replace
aging infrastructure and support the
U.S. energy renaissance. Significant
under-investment has also occurred
for electrical equipment, in addition to
power and communication. CAPEX
on structures is just beginning to rebound from the real estate recession.
HEALTH CARE
Health care equipment providers
should be major beneficiaries of
the last decade's lack of health care
CAPEX spending and the current
favorable health care trends. We expect
the pace of health care expenditure
growth to exceed that of the overall
economy - with an aging population,
pent-up demand for health care services, lower unemployment levels and
rising commercial insurance membership bolstering the sector.

38

APRIL 2017

| COMPOUNDINGS | ILMA.ORG

Nonresidential Fixed Investment by Type
Growth Through Q2 2016 (left)

Growth Contribution, Q2 2016 (right)

Percent change, year ago

Percent change, year ago

60

2.0
1.5

40

1.0
20

0.5
0.0

0

-0.5

-20

-1.0

Structures

Equipment

Entertainment
Originals

R&D

Software

Other

Transportation

Industrial

Information
Processing

Other

Mining

-2.0
Power and
Communication

-1.5

-60
Manufacturing

-40

Commercial &
Health

ticularly high. The corporate sector's
need to address weak productivity
growth (an indication that prolonged
under-investment might have begun
to take a toll on corporate efficiency) is
a key catalyst for technology spending.
Governments around the world are
now in better fiscal shape. Government
spending is a significant contributor to
overall demand for tech goods - comprising nearly 20 percent of total investment. While government outlays on
technology-related goods and services
have been extremely weak over the past
two years, improvements in federal,
state and local budgets are indicating
better times ahead. Personal consumption trends are also a major influence
on the tech sector. Consumer spending growth on technology products
bottomed in 2011, and has crossed into
positive territory for the first time in
three years. Tech export indicators look
healthy and, despite the positive cyclical
and secular backdrop, tech valuations
remain reasonable.

IPP

Source: Department of Commerce, Goldman Sachs Global Investment Research

The current trend of increased
paid patient hospital visits is providing health care facilities with the
confidence to continue with their
expansion plans, to the benefit of
equipment providers. This is already
helping to boost medical equipment
new-order growth.
ENERGY
While U.S. energy investment has
generally been very high over the last
decade, we think the U.S. energy
renaissance has much further to go.
The CAPEX slowdown that occurred
in mid-2014 was largely a result of the
temporary collapse of the U.S. energy
sector. We also see global oil markets
tightening, as global growth improves
and rest-of-world production growth
struggles because of geopolitical problems in major oil-producing countries
(Iraq, Iran, Libya and Russia). While
the integrated oil companies and the
exploration and production (E&P)
companies benefit from these trends,
the biggest winners of high CAPEX are
the oil service companies and the energy
master limited partnerships (MLPs).

This report is provided for informational purposes only and shall in no
event be construed as an offer to sell
or a solicitation of an offer to buy any
securities. The information described
herein is taken from sources which we
believe to be reliable, but the accuracy
and completeness of such information
is not guaranteed by us. The opinions
expressed herein may be given only
such weight as opinions warrant. This
firm, its officers, directors, employees
or members of their families may have
positions in the securities mentioned
and may make purchases or sales of
such securities from time to time in
the open market or otherwise and
may sell to or buy from customers such
securities on a principal basis.

Carter is executive vice
president-wealth management
for CSG Capital Partners of
Janney Montgomery Scott LLC
and is investment adviser to ILMA. He may be
reached at 202-955-4307 or mcarter@
janney.com. Janney Montgomery Scott LLC is
ILMA's investment firm.


http://www.ILMA.ORG

ILMA Compoundings April 2017

Table of Contents for the Digital Edition of ILMA Compoundings April 2017

ILMA Compoundings April 2017 - Cover1
ILMA Compoundings April 2017 - Cover2
ILMA Compoundings April 2017 - 1
ILMA Compoundings April 2017 - 2
ILMA Compoundings April 2017 - 3
ILMA Compoundings April 2017 - 4
ILMA Compoundings April 2017 - 5
ILMA Compoundings April 2017 - 6
ILMA Compoundings April 2017 - 7
ILMA Compoundings April 2017 - 8
ILMA Compoundings April 2017 - 9
ILMA Compoundings April 2017 - 10
ILMA Compoundings April 2017 - 11
ILMA Compoundings April 2017 - 12
ILMA Compoundings April 2017 - 13
ILMA Compoundings April 2017 - 14
ILMA Compoundings April 2017 - 15
ILMA Compoundings April 2017 - 16
ILMA Compoundings April 2017 - 17
ILMA Compoundings April 2017 - 18
ILMA Compoundings April 2017 - 19
ILMA Compoundings April 2017 - 20
ILMA Compoundings April 2017 - 21
ILMA Compoundings April 2017 - 22
ILMA Compoundings April 2017 - 23
ILMA Compoundings April 2017 - 24
ILMA Compoundings April 2017 - 25
ILMA Compoundings April 2017 - 26
ILMA Compoundings April 2017 - 27
ILMA Compoundings April 2017 - 28
ILMA Compoundings April 2017 - 29
ILMA Compoundings April 2017 - 30
ILMA Compoundings April 2017 - 31
ILMA Compoundings April 2017 - 32
ILMA Compoundings April 2017 - 33
ILMA Compoundings April 2017 - 34
ILMA Compoundings April 2017 - 35
ILMA Compoundings April 2017 - 36
ILMA Compoundings April 2017 - 37
ILMA Compoundings April 2017 - 38
ILMA Compoundings April 2017 - 39
ILMA Compoundings April 2017 - 40
ILMA Compoundings April 2017 - 41
ILMA Compoundings April 2017 - 42
ILMA Compoundings April 2017 - 43
ILMA Compoundings April 2017 - 44
ILMA Compoundings April 2017 - 45
ILMA Compoundings April 2017 - 46
ILMA Compoundings April 2017 - 47
ILMA Compoundings April 2017 - 48
ILMA Compoundings April 2017 - 49
ILMA Compoundings April 2017 - 50
ILMA Compoundings April 2017 - 51
ILMA Compoundings April 2017 - 52
ILMA Compoundings April 2017 - 53
ILMA Compoundings April 2017 - 54
ILMA Compoundings April 2017 - 55
ILMA Compoundings April 2017 - 56
ILMA Compoundings April 2017 - Cover3
ILMA Compoundings April 2017 - Cover4
https://www.nxtbook.com/ygsreprints/ILMA/G127535ILMA_vol71_no7
https://www.nxtbook.com/ygsreprints/ILMA/G126213ILMA_vol71_no6
https://www.nxtbook.com/ygsreprints/ILMA/G125546_ILMA_vol71_no5
https://www.nxtbook.com/ygsreprints/ILMA/G124996_ILMA_vol71_no4
https://www.nxtbook.com/ygsreprints/ILMA/G123886_ILMA_vol71_no3
https://www.nxtbook.com/ygsreprints/ILMA/G123315_ILMA_vol71_no2
https://www.nxtbook.com/ygsreprints/ILMA/G122980_ILMA_vol71_no1
https://www.nxtbook.com/ygsreprints/ILMA/G121540_ILMA_vol70_no11
https://www.nxtbook.com/ygsreprints/ILMA/G120882_ILMA_vol70_no10
https://www.nxtbook.com/ygsreprints/ILMA/G120035_ILMA_vol70_no9
https://www.nxtbook.com/ygsreprints/ILMA/G121XXX_ILMA_vol70_no8
https://www.nxtbook.com/ygsreprints/ILMA/G120XXX_ILMA_vol70_no7
https://www.nxtbook.com/ygsreprints/ILMA/G119XXX_ILMA_vol70_no6
https://www.nxtbook.com/ygsreprints/ILMA/G118112_ILMA_vol70_no5
https://www.nxtbook.com/ygsreprints/ILMA/G117382_ILMA_vol70_no4
https://www.nxtbook.com/ygsreprints/ILMA/G116888_ILMA_vol70_no3
https://www.nxtbook.com/ygsreprints/ILMA/G115555_ILMA_vol70_no2
https://www.nxtbook.com/ygsreprints/ILMA/G114774_ILMA_vol70_no1
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no12
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no11
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no10
https://www.nxtbook.com/ygsreprints/ILMA/g109884_ILMA_vol69_no9
https://www.nxtbook.com/ygsreprints/ILMA/g109284_ILMA_vol69_no8
https://www.nxtbook.com/ygsreprints/ILMA/g108494_ILMA_vol69_no7
https://www.nxtbook.com/ygsreprints/ILMA/g107507_ILMA_vol69_no6
https://www.nxtbook.com/ygsreprints/ILMA/g106483_ILMA_vol69_no5
https://www.nxtbook.com/ygsreprints/ILMA/g105803_ILMA_vol69_no4
https://www.nxtbook.com/ygsreprints/ILMA/g104743_ILMA_vol69_no3
https://www.nxtbook.com/ygsreprints/ILMA/g103647_ILMA_vol69_no2
https://www.nxtbook.com/ygsreprints/ILMA/g102869_ILMA_vol69_no1
https://www.nxtbook.com/ygsreprints/ILMA/g101930_ILMA_vol68_no12
https://www.nxtbook.com/ygsreprints/ILMA/g100836_ILMA_vol68_no11
https://www.nxtbook.com/ygsreprints/ILMA/g99200_ILMA_vol68_no10
https://www.nxtbook.com/ygsreprints/ILMA/g98468_ILMA_vol68_no9
https://www.nxtbook.com/ygsreprints/ILMA/g97711_ILMA_vol68_no8
https://www.nxtbook.com/ygsreprints/ILMA/G96767ILMA_vol68_no7
https://www.nxtbook.com/ygsreprints/ILMA/G95397ILMA_vol65_no6
https://www.nxtbook.com/ygsreprints/ILMA/G94323ILMA_vol68_no5
https://www.nxtbook.com/ygsreprints/ILMA/G93127_ILMA_vol69_no4
https://www.nxtbook.com/ygsreprints/ILMA/G91785_ILMA_vol68_no3
https://www.nxtbook.com/ygsreprints/ILMA/G90956_ILMA_vol68_no2
https://www.nxtbook.com/ygsreprints/ILMA/G89146_ILMA_vol68_no1
https://www.nxtbook.com/ygsreprints/ILMA/G87981_ILMA_vol67_no12
https://www.nxtbook.com/ygsreprints/ILMA/G85409_ILMA_vol67_no11
https://www.nxtbook.com/ygsreprints/ILMA/G83595_ILMA_vol67_no10
https://www.nxtbook.com/ygsreprints/ILMA/G81672_ILMA_vol67_no9
https://www.nxtbook.com/ygsreprints/ILMA/G80238_ILMA_vol7_no8
https://www.nxtbook.com/ygsreprints/ILMA/G79388_ILMA_vol7_no7
https://www.nxtbook.com/ygsreprints/ILMA/G78361_ILMA_vol7_no6
https://www.nxtbook.com/ygsreprints/ILMA/G77448_ILMA_vol7_no5
https://www.nxtbook.com/ygsreprints/ILMA/G75899_ILMA_vol67_no4
https://www.nxtbook.com/ygsreprints/ILMA/G75036_ILMA_vol67_no3
https://www.nxtbook.com/ygsreprints/ILMA/G72720_ILMA_vol67_no2
https://www.nxtbook.com/ygsreprints/ILMA/G72220_ILMA_vol67_no1
https://www.nxtbook.com/ygsreprints/ILMA/G70970_ILMA_vol66_no12
https://www.nxtbook.com/ygsreprints/ILMA/G69813_ILMA_vol66_no11
https://www.nxtbook.com/ygsreprints/ILMA/G67522_ILMA_vol66_no10
https://www.nxtbook.com/ygsreprints/ILMA/G66343_ILMA_vol66_no9
https://www.nxtbook.com/ygsreprints/ILMA/G64859_ILMA_vol66_no8
https://www.nxtbookmedia.com