How Allspring Selects Stocks They Think The Market is Undervaluing

Yeah, the beauty of this balance sheet focus is that balance sheets provide a buffer in terms of terms of tough times, but they also provide the optionality on the upside.

And so a common company would be a name like Canadian Pacific Kansas City Southern.

It's a railway company where the market focuses a lot on what's happening on the current income statement.

They think about global GDP trends, shipping volume, and they think about how that might impact future income statements. and it's relevant and that might push the stock price down in a backdrop like today where GDP is being questioned and trades being questioned.

But what we see is the combination of two businesses that took place a few years ago between Canadian Pacific and Kansas City Southern and how those two businesses coming together create a powerful asset base that's highly unique, giving them the ability to move goods from Mexico through the US into Canada and back the other direction.

And the integration of that is going to expand significantly the total of market they have available to them.

It'll expand the size of their topline growth rate and over time the synergies through precision railroading and the integration of assets will drive higher margin expansion.

We think the market's missing that today.

So the portfolio has a lot of companies that look like that where the market might be worried about today's income statement but longer term the balance sheet provides unique optionality and you're going to see that across every sector.

We are diversified across all sectors, letting the stock selection drive our results as opposed to stylistic or sectorbased decisions.