Separating Signal from Noise: Strategies for Equity Growth Investors

23 June 2025

4 min read

Thorsten Winkelmann| Chief Investment Officer—European and Global Growth Equities

Marcus Morris-Eyton| Portfolio Manager—European and Global Growth Equities

Newsflow and misperceptions can obscure the drivers of profit growth—especially during a volatile year like 2025.

Active investors must navigate tides of news flow that can alter their perceptions of the companies they invest in and distract them from their original rationale for buying. Facing a news flow torrent, it takes a highly focused approach to screen out the noise and concentrate on the core investment case for each holding.

The first half of 2025 has been a case in point: tariffs have dominated the headlines, and much published analysis has majored on companies’ tariff exposures, often to the exclusion of other important considerations. Mentions of tariffs and trade wars in corporate earnings calls skyrocketed relative to other common business and economic terms during the first half of 2025, according to Bloomberg data (Display).

Trade War and Tariffs Crowded out Other Topics

Frequency of Select Terms in 2Q 2025 Earnings Transcripts (Percentage Change vs. 4Q 2024)

A bar chart shows earnings transcript changes since Q4 2024: trade war and tariff mentions soared, other topics mostly sank.

As of June 13, 2025
Source: Bloomberg and AllianceBernstein (AB)

Vital Anchors for Growth Investors

How can equity investors avoid being swept off course? In our view, anchoring to key tenets that frame the fundamental drivers of earnings growth is the best antidote to news overload. The unique attraction of a growth stock is its potential for accelerating earnings and cash flows over a long timescale. So we think it’s self-evident that investors need to focus on the long term rather than the ebb and flow of daily news bulletins.

This long-game approach requires a different mindset: thinking like a business owner helps identify the characteristics of companies and managements that will help build enduring success. Based on that insight, scary headlines and market tempests can become opportunities for investors to acquire quality growth companies at attractive prices, rather than threats that shake them out of sound investments.

What Qualities Does a Successful Business Owner Prize?

Competitive advantage is prime. Great companies feature powerful and often underappreciated long-term growth potential. Their advantages can often derive from structural growth drivers that aren’t tied to the health of the wider economy, such as technological trends, healthcare innovation, industrial automation and the energy transition. And they’re compounded by high barriers to entry, whether these derive from high capex requirements, technology or quality edges.
A global mindset reveals the most opportunities. While many leading growth stocks are US-based, attractive businesses can be found around the world—often at lower prices.
Corporate culture must be robust. A healthy corporate culture has distinct hallmarks. Strong managers seek responsibility—and expect to be held accountable for their decisions, irrespective of the outcome. Decentralized management, with decision-making and accountability delegated to the business units, is a good sign of a well-run business.
Great managers build resilient businesses. Business owners that look to the longer term build resilience into their companies. In Europe, for example, many companies have diversified in ways that can mitigate the inevitable shocks from world events—including tariffs. Examples include: spreading operations worldwide; decentralizing decision-making; diversifying supply chains across several suppliers and countries; and creating local-for-local manufacturing sites that can operate within tariff boundaries.
Acquisitions must work for shareholders not management. Acquisitive growth companies must demonstrate a distinctive approach to M&A, activities that often erode shareholder value if not executed well. That means they take their time to identify targets and don’t rush into headline-grabbing big deals just to boost near-term earnings expectations. Instead, especially in fragmented market segments, they sharpen their competitive edge with a series of strategic acquisitions. That might involve buying small local competitors and then stepping up purchases of regional and even global businesses. We like these serial acquirers, as this strategy can help build their scale, improve purchasing power, drive organic growth and deepen their competitive “moat.”
Boring can be beneficial. Successful business owners want long-term results, not short-term excitement. Many of the businesses that offer consistent earnings can look relatively boring. In Europe, select industrial companies in relatively obscure niche markets can offer surprisingly solid long-term growth patterns. More broadly, stable organic growth, a sensible acquisition strategy with strong capital discipline and healthy cash returns on investment create a robust foundation for continuing success—but are hardly glamorous.

Filtering out the Noise in a Fluid World

High-quality, consistent businesses can offer good growth but don’t always make for good news stories. All too often, the financial media will flash headlines about weakening company fundamentals to create drama and generate clicks, adding to the uncertainty from trade wars, macroeconomic challenges and geopolitical tensions. Investors who truly understand a business can see through the information fog and forecast five to 10 years forward with conviction.

In a world where news flow can spin damaging stories, and perceptions shaped by negative headlines can trigger share-price volatility, investors can lose their confidence even in resilient companies. Staying anchored to core principles can help investors discern a company’s true potential amidst noisy headlines and turn market disruptions into strategic advantages for sustained equity growth.

The views expressed herein do not constitute research, investment advice or trade recommendations, and do not necessarily represent the views of all AB portfolio-management teams, and are subject to change over time.

About the Authors

Thorsten Winkelmann

Thorsten Winkelmann is Chief Investment Officer of European and Global Growth Equities. Prior to joining AB in 2024, he spent more than 20 years at Allianz Global Investors, where he was CIO of the Global Growth team and a portfolio manager for the Global Equity Growth and Europe Equity Growth strategies. Before that, Winkelmann was a portfolio manager within the Allianz Global Investors European Equity Core and Multi-Asset teams. He holds an MA in economics from the University of Bonn. Location: Frankfurt

Marcus Morris-Eyton

Marcus Morris-Eyton is a Portfolio Manager for European and Global Growth Equities. Prior to joining AB in 2024, he was a portfolio manager at Allianz Global Investors, which he joined in 2011. Morris-Eyton also worked as a discretionary sales manager at Allianz Global Investors in London, and in equity research at Credit Suisse. He was named one of the Top 40 Under 40 Rising Stars in Asset Management by Financial News in 2015. Morris-Eyton holds a BA with first class honours in English and philosophy from the University of Leeds. He is a CFA charterholder. Location: London

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Separating Signal from Noise: Strategies for Equity Growth Investors

Vital Anchors for Growth Investors

What Qualities Does a Successful Business Owner Prize?

Filtering out the Noise in a Fluid World

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