Source: Zhitong Finance and Economics
Author: Wei Haoming
Bank of America Corporation's strategists have listed some targets for investors who want to put cash back into the market after the stock market falls in 2022. The BofA equity strategy team has identified two "bottom-reading" sectors.
Hard-hit technology stocks
Bank of America strategist Savita Subramanian wrote in a report: "against the backdrop of the Fed's tough attitude, technology and growth stocks have performed worst so far this year. The Fed is not the only resistance for technology companies-lagging earnings are also a big factor. The consensus earnings of the NASDAQ 100 as a percentage of S & P 500 earnings in 2022 are now lower than they were at the end of 2020, which means that epidemic-driven demand will be fully reversed. "
But Subramanian says free cash flow of corporate value has been a reliable factor in the technology industry since 1985.
The team excludes the high-tech index ETF and the communications services select industry index ETF, but excludes telecoms and media, which are down more than 20 per cent from their highs and have a 10-year Treasury yield of more than 3 per cent free cash flow / market capitalization (FCF/EV). The sector does not include stocks rated "outperform".
The following are stocks with a FCF/EV ratio of more than 3%:
Bear market rebounding stocks
"during a bear market rally, the low-quality, high-risk stocks with the biggest declines generally outperform the broader market," Subramanian said. The BofA team screened stocks in the S & P 500 with high risk (the top five of the 1-year beta) and low quality (rated B or below).
Here are the stocks with a high beta coefficient for one year:
Edit / Jeffrey