Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
The RBC research team has updated their list of top 30 global stock picks which includes five Canadian companies.
The list, in alphabetical order, goes (domestic in bold) AbbVie Inc., Alimentation Couche-Tard Inc., Americold Realty Trust, Appen Ltd., Brookfield Asset Management Inc., Canadian Natural Resources Inc., Canadian Pacific Railway Ltd., Cigna Corp., Cintas Corp., Crowdstrike Holdings Inc., Docusign Inc., DuPont de Nemours Inc., GDS Holdings Ltd., Genmab A/S, Gilead Sciences Inc., Kingfisher PLC, LVMH Moet Hennessy-Louis Vuitton SE, Markel Corp., McDonalds Corp., Ollie’s Bargain Outlet Holdings Inc., Orsted A/S, PepsiCo Inc., Roper Technologies Inc. , Royal Dutch Shell PLC, Stericycle Inc., The AES Corp., Thomson Reuters Corp., Truist Financial Corp., Uber Technologies Inc. and Visa Inc.
“@SBarlow_ROB RBC: Top 30 stock ideas for 2020” – (table) Twitter
See also: “@SBarlow_ROB BoA: ‘U.S. High Quality & Dividend Yield Screen” – (table) Twitter
Morgan Stanley strategist Johnathan garner has published the firm’s list of stocks representing “Global Best Business Models,” using the full capabilities of the firms’ analysts, strategists and economists.
Mr. Garner summarizes the methodology, “Our approach can be thought of most easily as a Quality approach focusing on Profitability, Capital Use and Balance Sheet Risk with incremental Valuation screening focusing on both Deep Value and Current Value metrics.”
There are 37 names on the list (domestic in bold again) – Boeing Co., Honda Motor, HDFC Bank, JP Morgan Chase & Co., UBS Group AG, Coca-Cola Co., Amgen Inc., Air Liquide, LVMH Moet Hennessy-Louis Vuitton SE, Las Vegas Sands Corp., Blackrock Inc., PTT Public Co., Suncor Energy Inc., Costco Wholesale Corp., Nestle SA, Abiomed, UnitedHealth Group Inc., Unicharm, Honeywell International Inc., Progressive Corp., Amazon.com Inc., Visa Inc., Komatsu, Tencent Holdings Ltd., Walt Disney Co., Vale, Eli Lilly & Co., Roche Holding AG, American Tower Corp., Texas Instruments, Adobe Systems, Ross Stores Inc., Arista Networks, Hexagon AB, Telus Corp., Canadian National Railway Co. and CLP Holdings.
“@SBarlow_ROB MS top global picks for “Best Business Models”' – (table) Twitter
Citi strategist Hong Li details what might be the beginning of a big shift in market leadership,
“Alongside record factor volatility last month, valuations dropped, while short interest jumped in three highly correlated defensive factors: Low Beta (Low Vol), Momentum, and Growth. This could indicate some investor trepidation regarding the highly crowded defensive trade and could signal the beginning of an unwinding or scaling back in that space.
Low Vol remains the most crowded factor. Low Vol’s macro risk remains at a 20-year high, and short interest ratio remains elevated in high-beta stocks, albeit down from the historical high in May (Figure 2). Together with elevated macro risk and volatility in associated factors, this suggests that any unwind of the very crowded defensive trade, which has been building over the past two years, will be a long and volatile road. It is worth noting that over the last two months, Low Vol has shifted back to more overweight in REITs, with less weight in Consumer Staples and Healthcare”
Defensive sectors like utilities, consumer staples and real estate have been extremely popular with investors in large part because of high dividend yields in comparison with government bonds. Significant unperperformance in this sectors, if it occurs, would upset a lot of domestic portfolios.
Diversion: “The Week America Lost Control of the Pandemic” – The Atlantic
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