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Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

The Bespoke Investment Group has noted a clear move to value from growth stocks in recent market sessions, at the expense of FAANG stocks,

“From last Thursday’s close (8/6) through [Tuesday’s] close, the average stock in the S&P 500 gained 2.1%. But if you hold positions in any of the five largest stocks in the S&P or have Tech and Health Care exposure, you’ve likely underperformed that 2.1% average gain by a pretty big margin. Over the last three trading days, we’ve seen a clear rotation out of many mega-cap stocks that had been leading the market higher, while we’ve seen rotation into parts of the market that had been weak: Energy, Transports, Industrials, and Financials… There’s been a clear rotation out of growth and momentum stocks into stocks with “value” characteristics. The deciles with the lowest P/E ratios, lowest price to sales ratios, and highest dividend yields have seen average gains of more than 4.75% over the last three trading days, while deciles with higher valuations and low or no dividend yields are mostly flat to down.”

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“@SBarlow_ROB Bespoke: “There’s been a clear rotation out of growth and momentum stocks into stocks with “value” characteristics"” – (research excerpt) Twitter

***

BofA Securities quantitative strategist Savita Subramanian compiled a list of the most overweight and neglected U.S. stocks by active fund managers. If Bespoke is right and a market rotation is underway, over-owned stocks should fall sharply against the neglected companies.

The most over-owned stocks are (in order) salesforce.com, Adobe Inc., Facebook Inc., United Health Inc., Visa Inc., Paypal Holdings Inc., Thermo Fisher Scientific Inc., and Mastercard Inc.. The most neglected stocks are Amcor PLC, WEC Energy Group Inc., People’s United Financial Inc., Coty Inc., A.O. Smith Corp., Ford Motor Co., W.R. Berkely Corp., Leggett & Platt Inc. and Tiffany & Co.

“@SBarlow_ROB BoA: Most over-owned and neglected U.S. stocks” – (chart) Twitter

***

Citi strategist Alex Miller published his monthly update of the world’s best and worst performing investment themes,

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“Video Games tops the tree, with Services Offshoring, Patents/IP and IT Services rounding out the Top 3, with the likes of A.I., Cloud Computing, Healthcare IT, and Smart Mobile Devices Demand all prominently featuring in the Top 10... China Tourism Spend rooted at the foot of the 80+ Themes we track, with Luxury Spend … Fossil Fuels, and [agricultural technology] … Amongst the top 10 performing themes in July, Education saw the strongest price performance (+12.56%) as well as Services Offshoring (+12.03%) and Manufacturing Onshoring (+11.15%).”

The report also listed companies with exposure to the most top performing themes. The top ten are Samsung Electronics, Taiwan Semiconductor, SK Hynix, Apple Inc., Qualcomm, Tata Consultancy, Resmed CDI, Cerner, Digital Telecom (Thailand) and Netlink (Singapore)

***

Newsletter: “No Free Lunch For Income Investors” – Globe Investor

Diversion: “Expiring vs. Permanent Skills” – Collaborative Fund

Tweet of the Day:

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