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November 27, 2023

Commentary: NCM Income Growth Class

On November 27, 2023, Portfolio Manager Alex Sasso, CFA, provided some perspective on the current strength of consumer spending and shared an update on how he has been deploying cash in the fund.


Hi everybody, name is all Alex Sasso, I'm the lead portfolio manager for NCM Income Growth fund. Today is Monday, November 27th, 2023. It's hard to believe that November is almost behind us. And speaking of this Monday, it's affectionately known as Cyber Monday, the busiest online shopping day, traditionally the busiest online shopping day of the year.

And just a few days ago, we had Black Friday. And preliminary data shows that Black Friday did just shy of $10 Billion in online sales. And that represents a seven and a half percent increase year over year. So pretty significant. And I would also say much better than what most analysts had been predicting. And obviously, this was significantly ahead of pre-pandemic levels by the tune of almost 33%.

And when you combine that with Thanksgiving and Thanksgiving sales in the U.S. online sales grew at, call it roughly 7%. But the two days combine to roughly $15 billion or just over $15 billion. So some pretty significant numbers in a pretty tough economic environment. You know, some analysts are predicting that Cyber Monday will represent the biggest online shopping day of the year, which, as I mentioned earlier, it has traditionally been. And the number that analysts are expecting is around $12 billion in sales.

And just to give you one point of reference here, back at home in Canada, we have Shopify. And for Black Friday, they represented really strong numbers. It was a record for them. They saw growth in transactions and dollar value of transactions through their solution. It had grown by about 22% to $4 billion just to themselves. So, you know, this is really strong.

And then the other thing I would mentioned is the company talked about the average ticket. And the average ticket was up just over 7% to $110 a person. So, again, quite, quite strong numbers.

There's another firm that puts a survey out there called Salesforce, and they noticed that, from a global perspective this time, Black Friday online spending was about $16.5 billion versus $15 billion a year ago. So quite strong numbers.

And I think the lesson in all this is that jobs equals spending. So when somebody in North America feels confident about their employment, they tend to spend, and particularly at this holiday season.

And I think it kind of sets up 2024 pretty nicely. And as we think about 2024, BMO put out a chart in their 2024 predictions just recently, and it's a chart showing the S&P 500’s performance 18 months after a 20% gain from the bottom of the market. Again, when you have a 20% gain, it signifies a new bull market.

And so what they're saying is 18 months after that bottom, the market is up roughly 23% on average in those kind of cycles since the 1950s. So very, very significant numbers. And as a result of this and a bunch of other work that we're doing, we've started positioning the portfolio, utilizing some of the dry powder we had, i.e. some of the cash we had.

And so we've invested in some new companies, for example, a company called Pollard Banknote, which we're really excited about, a company called Stelco, a company called Wajax, and finally, a company called Tecsys.

Now, you may have heard me talk about Tecsys in the past because we own it in NCM Small Companies, and we just introduced it to the NCM Income Growth fund. And so what Tecsys does is they provide supply chain management software. This is really focused in on the retail channel, in the hospital and hospital network channels. They're having really good success with the hospital network channels. Now, for the last couple of years, you may look at some of their growth rates, which are still significant, but you may think that given what happened with COVID, that their sales should have been stronger.

Well, in reality, those hospitals were too busy to implement a brand new software supply chain management solution. And what we're seeing today is we're seeing those hospitals now have the bandwidth to implement these solutions, which obviously benefits Tecsys, and the reason why we decided to put it into NCM Income Growth as well. I'll leave it there.

If you have any other questions, please feel free to reach out to your regional salesperson at


The information in this video is current as of November 27, 2023 but is subject to change. The contents of this video (including facts, opinions, descriptions of or references to, products or securities) are for informational purposes only and are not intended to provide financial, legal, accounting or tax advice and should not be relied upon in that regard. The communication may contain forward-looking statements which are not guarantees of future performance. Forward-looking statements involve inherent risk and uncertainties, so it is possible that predictions, forecasts, projections and other forward-looking statements will not be achieved. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.



Alex Sasso, CFA

Chief Executive Officer and Portfolio Manager of NCM Small Companies Class and NCM Income Growth Class.