Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Wells Fargo analyst Colleen Hansen attempted to help out the Oracle of Omaha with a report called “ What Would Buffett Buy Now?”.
There are two separate lists of U.S. stocks.
The first is based on value-based criteria including high return on invested capital, low debt to equity and low price to earnings and price to book ratio. The stocks on this list are Acuity Brands Inc., Cognizant Technology Solutions Corp., Facebook Inc., Malibu Boats Inc A, VMWare Inc. A , Biogen Inc., Noble Midstream Partners LP, Regeneron Pharmaceuticals Inc., Shell Midstream Partners LP and Steve Madden Ltd.
The second list features growth at a reasonable price stocks chosen by low PE to growth ratios, return on equity and net profit margin. The stocks here are Brighthouse Financial Inc., Baxter International Inc., Altice USA Inc., Microchip Technology Inc., Nexstar Media Group Inc. A, VICI Properties Inc., Gray Television Inc., Berry Global Group Inc., Applied Materials Inc., QTS Realty Trust Inc. A , Prudential Financial Inc., World Wrestling Entertainment Inc. and Computer Programs and Solutions Inc.
Berkshire Hathaway does, of course, own a lot of Wells Fargo stock, but I’m not sure that matters here.
“@SBarlow_ROB From Wells Fargo: "What would Buffett buy now?" (value)” – (table) Twitter
“@SBarlow_ROB Wells Fargo: “What Would Buffett Buy Now?” GARP list” – (table) Twitter
Nomura’s Tokyo-based quantitative strategist Masanari Takada continues to follow trends among the most aggressive, speculative global equity portfolios, including the algorithmically driven Commodity Trading Advisor (CTA) funds,
“We think it is also the case that the bullish narrative is failing to fully gain traction in the market. Whatever the case, the spontaneous rebound in investor sentiment has yet to make the transition to a genuine improvement trajectory. Similarly, we suspect that CTAs are unable to identify any trend in S&P 500 futures worth trying to follow. We think that the next trend in the market will therefore be driven not by CTAs but by fundamentals oriented investors trading in a particular direction”
“@SBarlow_ROB Nomura's Takada, "we think it is also the case that the bullish narrative is failing to fully gain traction in the market' – (research excerpt) Twitter
Also from Nomura, the firm’s globally-prominent chief economist Richard Koo warned investors that the recovery will be a long slog,
“Far fewer economists are predicting a V-shaped recovery as they have begun to realize just how severe the resulting recession is likely to be… The airlines, which have been particularly hard-hit, are now expecting that the recovery will not happen until the end of 2021 and have announced large job cuts… As of today, however, the total number of worldwide infections is in excess of 4.5 million and is still growing. Once the problem gets this big, not only will it take a long time to bring the number of new infections down to zero, but the economy as a whole simply cannot wait.”
“@SBarlow_ROB Koo: "Once the problem gets this big, not only will it take a long time to bring the number of new infections down to zero, but the economy as a whole simply cannot wait" – (research excerpt) Twitter
Diversion: “The Weirdest Images Ever Taken on Mars” – Gizmodo
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