Cowen Research Identifies Themes That Will Define Industries and Drive Investment Performance In 2022
NEW YORK, Dec. 06, 2021 (GLOBE NEWSWIRE) — Cowen Inc. (NASDAQ:COWN) (“Cowen” or the “Company”), today announced the release of Themes 2022. This annual handbook identifies themes in which Cowen’s sector knowledge and collaborative approach provide integral insight into trends, policies and advancements that are defining or redefining industries. As in prior years, Themes 2022 builds off Cowen’s flagship Ahead Of The Curve® Series, the preeminent equity and policy research product for institutional investors and corporate decision makers. Themes 2022 is accessible here.
Robert Fagin, Cowen’s Director of Research noted, “In Themes 2022, we once again feature areas of investor focus where Cowen’s domain expertise has been central to the discussion and debate. In all cases, Cowen Research offered its hallmark collaborative approach to help inform our viewpoints, working across sector teams to provide valuable perspective.” Each theme highlighted is accompanied by a listing of relevant Cowen reports and events.
Bill Bird, Cowen’s Head of Thematic Content, said, “The fundamental viewpoints featured in Themes 2022 are bolstered by the insights of our Washington Research Group. This has become critical in an environment in which divining the outcome of key policy debates has become increasingly crucial to forecasting financial markets. In addition, we overlay a unique perspective on ESG and sustainability. This year, Cowen became the first major Wall Street firm to place company-specific ESG Scores on the cover of its research reports; we added a dedicated ESG policy analyst to our Washington Research Group; and built Wall Street’s most robust coverage of mobility and energy transition.”
The table below summarizes the 14 areas of focus addressed in Themes 2022.
|SUMMARY OF COWEN’S INSIGHT
|The auto industry is undergoing multiple transitions. We believe electrification of transport will happen sooner than the market expects, setting off new rounds of innovation. The $7 trillion transportation industry is ripe for disruption. Next-gen mobility will introduce new business models and disrupt many other parts of the economy.
|We are at a tipping point in the transition to a low carbon economy. We believe many different segments of energy transition will benefit from unprecedented levels of new investment. No single silver bullet will solve the world’s energy crisis. We see room for multiple technologies to succeed.
|Cryptocurrencies and Digital Assets
|We believe crypto will be regulated similar to the non-crypto product it is trying to replace. That includes consumer protection, tax, and money laundering. The regulatory framework for crypto will take time to develop.
|The Biden Administration and Congress have ambitious plans to challenge China diplomatically, economically, technologically, and militarily. U.S.-China competition/decoupling will be a decades-long strategic competition.
|Health Care Innovation
|Biotech and pharmaceutical innovation is accelerating, including cell & gene therapies (C>) and related tools, a reinvigorated focus on certain infectious diseases, psychedelics, potentially disease-modifying therapy for Alzheimer’s Disease, and targeted oncology. Precision medicine is in its infancy, ushering in a new wave of innovators, significant investment by incumbents, and addressing very large markets, most notably cancer treatment, a $166B global pharmaceutical therapeutic category.
|ESG matters not only from a consumer perspective, but also from a capital markets perspective. The flow of dollars seeking ESG-oriented investments is significant. That matters for asset managers and for companies seeking to raise capital. A Cowen survey found that 80% of 18-34 year-olds view sustainability as “somewhat” or “very” important to their purchasing decisions. This will heighten money managers’ focus on sustainability.
|The Post-COVID Consumer
|Several consumer behaviors and preferences tipped during the pandemic. Next-gen consumers are rising in importance and gaining clout. A brand’s social impact and consumers’ perception of sustainability will increasingly influence purchase decisions.
|Sustainable Food & Healthy Living
|Driven by next-gen consumers, a shift toward more environmentally friendly and healthy products is underway. We believe we are on the cusp of one of the most dramatic changes in packaged food in recent memory. For example, our proprietary work points to a 10x increase in the global oat-based segment to $19 billion by 2026.
|Cannabis has continued to mainstream and we have been consistently raising our total addressable market estimate. There remains a significant opportunity to transition a large illicit market. We have maintained more measured expectations on the timing of Federal action, but we continue to believe legalization is a matter of “when,” not “if.”
|Health Care Business Model Transformation
|Payment model innovation, site-of-care delivery transformation, and the digital data revolution are three investable mega-trends. We believe that a migration to value-based care is an incremental $1 trillion market opportunity over the next decade. COVID dramatically accelerated a shift to site-of-care.
|The COVID pandemic meaningfully accelerated enterprise software innovation and adoption, ushering in a new wave of computing frameworks and applications that will set a compelling course for growth and innovation for years to come. We believe software companies will continue to scale at an unprecedented pace, driven by several factors including faster cycles from cloud, new routes to market such as self-service and “freemium,” and higher visibility into revenue streams from subscription models.
|Cyber attacks have continued to escalate. The cost of the average data breach in 2021 was $4.2M. Attacks have increased 4x in just the past two years. Cybersecurity solutions are shifting from “nice-to-have” to “must-have,” particularly as enforcement actions create pressure to implement cyber and compliance protections. We believe the $147B information security and risk management market can compound at 9% over the next five years.
|Robotics & Automation
|The Robotics sector stands to benefit from growth in eCommerce logistics demand, labor shortages, an aging U.S. workforce, and defense technology modernization policies. We also see penetration increasing significantly in surgical robotics. Our proprietary survey of end users shows a dramatic upswing in spending plans for robotics.
|We estimate that only 30% of the volume that hits the tape in U.S. equities is single-stock, accessible, non-HFT (high frequency trading) liquidity. “Inaccessible liquidity” introduces a new factor to incorporate in trading decision-making processes and algos.
For more information and to read the Cowen 2022 themes report, please click here.
About Cowen Research
Cowen’s research department has 60 senior analysts covering 965 securities across multiple sectors including industrials, consumer, energy, health care, technology, media & telecom, and cross-asset, as well as a deep Washington policy team.
About Cowen Inc.
Cowen Inc. (“Cowen” or the “Company”) is a diversified financial services firm that operates through two business segments: a broker dealer and an investment management division. The Company’s broker dealer division offers investment banking services, equity research, sales and trading, prime brokerage, global clearing and commission management services. Cowen’s investment management division builds on Cowen’s core insights by developing differentiated, actively managed investment strategies that seek to meet the dynamic needs of our clients. Founded in 1918, the firm is headquartered in New York and has offices worldwide. Learn more at Cowen.com.
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Source: Cowen Inc.