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

Goldman Sachs U.S. equity strategist David Kostin recommends dividend growth stocks and provides related stock picks,

“We are raising our 2022 S&P 500 dividend forecast to $67 per share, representing 10% year/year growth (from 8%) … Historically, dividends have outperformed equity shares during periods of elevated inflation. Since 1940, real equity returns have turned negative when headline CPI inflation exceeded 5% … High dividend yield and high dividend growth stocks also typically outperform during periods of high inflation and currently trade at attractive valuations.”

Goldman’s high dividend growth basket includes 50 stocks. Those most likely to be of interest to Canadian investors include Lumen Technologies, Best Buy Inc., Ford Motor Co., Molson Coors Beverage, PepsiCo Inc., Merck & Co. Inc., Abbvie Inc., United Parcel Service, Intel Corp., Corning Inc., Automatic Data Processing Inc., and Analog Devices Inc.

" GS U.S. high dividend growth basket” – (table) Twitter


Citi U.S. quantitative strategist Hong Li argues that oversold stocks with rising earnings revisions represent lucrative buying opportunities,

“Increased volatility in rates and oil markets, triggered by the geopolitical risk, brought to forefront the need for macro risk control. We recommend Price Momentum and Earnings Revision as they continue to carry lower macro risk than other factors. The higher volatility in the equity market and factors creates a fertile ground for our systematic oversold strategy as it has continued to deliver positive returns in recent months… ur oversold strategy is not predicated on oversold conditions of the broad market. However, it has worked better during volatile periods. We have found that stocks with low Short Interest and low Price Momentum (oversold) have fairly consistently outperformed the stocks with high Short Interest & low Price Momentum(crowded shorts) over the last 26 years, particularly since the GFC. We continue to advise investors to diversify across stocks and overweight Earnings Revision, Price Momentum, and our systematic oversold strategy as they currently carry much less macro exposures.”

Mr. Li highlights oversold U.S. stocks that are buy rated by Citi anlysts. These picks are Walt Disney Co, AT&T Inc., T-Mobile U.S. Inc., Electronic Arts Inc., Inc., Starbucks Corp., Ross Stores Inc., Monster Beverage Corp., Medtronic PLC., Zimmer Biomet Holdings Inc., General Electric Co., Cummins Inc., Costar Group Inc., ADT Inc., Fidelity National Information Services , Global Payments Inc. and Fleet Cor Technologies Inc.

“Citi: Attractive Oversold Stocks with Citi Buy Rating” – (table) Twitter


RB Advisors, founded by former Merrill Lynch chief quantitative strategist Richard Bernstein, published Has the bubble already deflated? ,

“Nearly 70% of technology stocks are in a bear market, with almost one-third down over 50% from their highs. Just a couple months ago, many investors were falling over themselves to pour more money into the NASDAQ 100 at 16,000. So with the index now trading closer to 14,000, it is not surprising that it appears to some like a significant buying opportunity. History says it may still be too early… During the prior Tech Bubble collapse, the Tech and Telecom (now renamed Communication Services) sectors went from a combined weight of 41% of the S&P 500® to a low of 16% in 2002. Despite the significant underperformance of Tech and Communication Services in this correction, the combined weight of these two sectors has decreased only from 40% to 38% … Here are several signposts that might be helpful to determine when the bubble is truly deflated: Valuations will significantly contract, and the IPO market will enter a cold period. Tech and cryptocurrency analysts will go from heroes to villains. The number of technology-focused investment products, such as ETFs, will shrink. Business media will cancel TV segments and news columns dedicated to technology and innovation. People will no longer quit their jobs to join early-stage start-ups or to trade cryptocurrencies. No one will care about reading a report like this about when the bubble has deflated.”

“Has the bubble already deflated?” – RB Advisors


Newsletter: “Answering fund managers’ biggest questions about the Ukraine crisis’” – Globe Investor

Diversion: “The 25 Best Batman Villains, Ranked” – The Ringer

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