Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Morgan Stanley U.S. quantitative strategist Boris Lerner’s MOST portfolio combines a number of factors to uncover stocks with the highest projected risk-adjusted returns with a three month time horizon. This month’s update was published Thursday. There are 37 stocks selected with prominent names including Apple Inc., Microsoft corp., Mastercard Inc., Home Depot Inc., Cisco Systems Inc., Nike Inc., Boeing Co., Estee Lauder Co.s, Lam Research Corp., Acitivision Blizzard Inc., Parker Hannifin Corp., L Brands Inc., F5 Networks Inc. and Alaska Air Group Inc.
“MS’s MOST portfolio is the quant team’s top picks for 3m risk-adjusted return” – (full table) Twitter
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Citi analyst P.J. Juvekar reiterated his bullish call on Canada’s Ballard Power Systems Inc. despite near term headwinds,
“Our top three takeaways from BLDP’s call were as follows: 1) Sales missed consensus, and backlog has trended lower as the China fuel cell (FC) market remained muted while awaiting further policy pronouncements. However, BLDP’s sales pipeline is up 70% over the last five quarters. The road ahead will be bumpy near term, but decarbonization trends are supportive for FC adoption in the long run. 2) Management is optimistic about FC electric buses (FCEBs), particularly in the EU, with follow-on orders from Wrightbus and Solaris. BLDP delivered 69 FC engines of a total 135 orders to date, with the remainder expected to be shipped this year. 3) A 240kW FC engine for HD trucks developed with MAHLE will be available for testing by year-end, with initial adoption by OEMs in 2023-24. Trains and off-road vehicles are developing faster than expected, but commercial sales are unlikely until the out-years (2030+).’
“@SBarlow_ROB Citi still bullish on Ballard Power despite revenue miss” – (research excerpt) Twitter
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BofA Securities quantitative strategist Savita Subramanian published a new list of top stock picks combining high-quality balance sheets and dividend growth,
" The High Quality & Dividend Yield Screen underperformed the S&P 500 index in April by 1.1ppt (+4.2% on a total return basis vs. +5.3% for the S&P 500 index). Year-to-date, the screen has led the index by 3.2ppt (+15.0 % vs. +11.8 %, respectively). Since inception (Feb. 2004), the screen has outperformed the S&P 500 index by 1.7ppt per year.”
The stock selection method includes credit rating, profitability in terms of return on equity, free cash flow and debt to equity ratios.
The current member stocks are C.H. Robinson, Cintas Corp., Quest Diagnostics Inc., Emerson Electric Co., General Dynamics Corp., Garmin Ltd., Johnson & Johnson, Packaging Corp., Public Storage, Robert Half International Inc., Snap-On Inc. and Texas Instruments Inc.
“@SBarlow_ROB B of A’s top picks for high quality U.S. dividend yield” – (table) Twitter
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Newsletter: “Should I buy a position in hydrogen producer Air Products and Chemicals Ltd.?” – Globe Investor
Diversion: “The Case Against the Eagles” (language) The Ringer
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Scott Barlow