Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
The RBC Capital Markets research team released an updated top 30 global stock ideas list. Changes include Associated British Food replacing Inditex, Illumina in for CSL Ltd., Abermarle added in favour of DuPont. The picks have been performing well,
“In Q2/23,the Top 30 list delivered a total return of +8.3% (USD terms), above the MSCI World Index at +6.8%, with Top 30 performance led by Meta Platforms (META US) at +35.4%, Palo Alto Networks(PANW US) at +27.9% and Ferrari (RACE IM) at +21.5%. Year-to-date, the list has delivered a total return of +21.1%, above the benchmark at +15.1%, and since inception of our quarterly list at YE2019, the Top 30 has delivered a total return of +49.2%, above the benchmark at +33.0%”
Stocks in the portfolio not mentioned above are Alimentation Couche-Tard, Alnylam Pharmaceuticals Inc., American International Group, Anheuser Busch Inbev, Boston Scientific Corp., Canadian Natural Resources, Canadian Pacific Kansas City Ltd., Constellation Software, CrowdStrike Holdings Inc., Diamondback Energy Inc., Element Fleet Management Corp., Ferrari NV, HEICO Corp., London Stock Exchange Group, Lonza Group AG, M&T Bank Corp., Mastercard Inc., PG&E Corp., Restaurant Brands International, S&P Global Inc., Siemens Aktiengesellschaft, Telus Corp., Veeva Systems Inc., Ventas Inc. and Wesco International.
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Goldman Sachs chief U.S. equity strategist attempted to uncover the next big stock winners,
“Rule of 10: Screening for S&P 500 stocks with secular sales and net income growth greater than 10%The largest tech stocks in the US equity market make it clear that identifying firms capable of posting sustained 10%+ sales growth in their nascent stages can be rewarding for investors. Rapid and consistent sales growth was a common attribute of today’s largest stocks as they ascended the index ranks. We refresh our “Rule of 10″ screen, which identifies stocks with realized and expected annual sales growth greater than 10% during the five years from 2021 through 2025. The stocks with the fastest 2022-25E consensus sales CAGR [compound annual growth rate] include ENPH, TSLA, SEDG, PANW, NOW. We also present a similar screen based on net income growth. 8 stocks fall into both screens: NOW, PAYC, FTNT, PODD, CMG, INTU, CDNS, APTV”
“GS: “Rule of 10: Screening for S&P 500 stocks with secular sales and net income growth greater than 10%”” – (research excerpt) Twitter
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Things are not improving in the Canadian office space sector, according to BMO senior economist Robert Kavcic,
“Canada’s office vacancy rate continued to rise in 2023Q2, hitting 18.1% (all classes), or the highest level since 1994. This is according to CBRE data. That’s up 1.6 ppts from a year ago, so the tough situation in office real estate is not getting any better (net absorption has been negative for three consecutive quarters). Note that almost all of Canada’s major centres have seen vacancy rates rise from pre-COVID levels (Halifax is an exception as the market has tightened recently). Some markets clearly entered this period in much weaker positions (e.g., Calgary after the oil price bust). But, Toronto has seen the biggest deterioration, with the vacancy rate across the GTA up to 17.9% (or 15.8% in the downtown core). This is a pretty clear reflection of more flexible work patterns, which means this sector could be struggling with oversupply for a long time…'
“BMO- “Office Market: No Supply Constraints Here”” – (research excerpt) Twitter
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Diversion: “Mercedes-Benz held the top spot since 2013, but there’s a new best-selling luxury auto brand in Canada” – Driving.ca
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