Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Goldman Sachs U.S. equity strategist David Kostin combed the earnings season conference call transcripts to uncover the major corporate themes,
“Managements are optimistic about a continued US recovery and pent-up consumer demand. Certain consumer behavioral shifts are expected to persist. Selected examples: AAL, ADM, ADP, AEP, ALK, AMZN, AVB, AXP, CAG, CARR, CBOE, CL, CLX, CMCSA, DAL, DPZ, GE, GOOGL, IQV, LVS, LW, LYB, MCD, SBUX, USB, WY … Inflation: Firms discussed the implications of rising input costs for profit 2.margins. Many will pass costs along to consumers or optimize cost efficiency. Selected examples: ALLE, AVY, CAG, CARR, CAT, CHD, CL, CLX, CMG, CTAS, F, FAST, FBHS, FCX, GPC, GWW, HAL, IEX, IP, KHC, KMB, KO, LKQ, LW, MAS, MHK, NWL, ORLY, PH, PNR, SHW, SNA, TAP, TFX, TXT, WHR … Buybacks: Strong financial performance and improved business outlooks 3.have propelled share buybacks. Selected examples: AAPL, BIIB, CAG, CE, CMA, CMG, COG, CSX, HIG, JPM, LMT, NFLX, OMC, OTIS, POOL, TRV, TYL”
“@SBarlow_ROB GS: 5 major takeaways from U.S. earnings calls” – (research excerpt) Twitter
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Credit Suisse strategist Michel Lerner believes the rally in cyclical stocks has gone too far, too fast, opening up opportunities in higher quality stocks that are trading at a discount to historical levels,
“Style rotation over the last 6 months has not been this pronounced since the dotcom bubble in the case of Value vs. Growth and is at its most pronounced in at least 30 years in the case of Global HealthCare vs. Energy…With such a pronounced relative underperformance of long-duration and defensive tilts, it has now opened up some stock opportunities that may appeal to investors concerned that the market rally has run too far.”
Mr. Lerner includes a list of 28 stocks he finds undervalued, including two domestic firms – Empire Co. Ltd. and Quebecor Inc.
The most interesting of the international ideas includes Merck & Co., Advanced Micro Devices, Qualcomm Inc., Procter & Gamble , Bristol Myers Squibb Co. (disclosure: I own this stock) and game developer Activision Blizzard Inc.
“@SBarlow_ROB CS: rapid rotation into cyclicals has left opportunities elsewhere” – (full table) Twitter
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The research team at Wells Fargo published a list of top picks for high yield U.S. equities. The objective is listed as “a diverse list of high yielding stocks with secure dividend streams” but they also warn the stocks represent a higher level of risk. There are 13 companies listed – AT&T Inc., Cogent Communications Holdings Inc., Verizon Communications Inc., Garmin Ltd., Genuine Parts Co., Home Depot Inc., Target Corp., Coca-Cola Corp, PepsiCo Inc., Procter & Gamble co., Chevron Corp., Exxon Mobil Corp. and Phillips 66.
" @SBarlow_ROB Wells Fargo: Top high yield U.S. equities” – (full table) Twitter
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Diversion: “Three Alzheimer’s Patients Were Able to Communicate Again After Experimental Radiation Treatment” – Gizmodo
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