Displaying items by tag: large caps

Wednesday, 21 October 2020 10:12

Why it is Time for Large Cap Value

(New York)

Large cap value is a very interesting area at the moment. Over the last few weeks there has been a pickup in breadth, with gainers outpacing losers 2-to-1. Megacap tech stocks are not leading the market like they were early on in the recovery. That means the chances for broad market gains are looking stronger. With that in mind, large cap value looks like an excellent choice. Compared to small and midcaps, large caps are less volatile and more diversified. They do have more international exposure (which could be a positive or a negative), but on the whole they appear as though they have as much or more upside potential with less downside risk.


FINSUM: If you believe in a coming broad-based rally in stocks, then large cap value seems like a good place to be.

Published in Eq: Value
Monday, 02 December 2019 09:40

Wall Street’s Official 2020 Stock Prediction

(New York)

Analysts from across the Street have now put their predictions in for 2020, and the outlook is not as rosy as one would expect from a bunch of analysts who get paid to be bullish. The consensus outlook for equities can best be described as “meeehhh”. Morgan Stanley, UBS, and Stifel are forecasting that the S&P 500 will fall next year, while Citi, BAML, and Goldman are forecasting rises, but modest ones (single digits at the high end). Taken as an average, analysts think stocks will rise just 3% next year.


FINSUM: A published 3% forecasted rise by Wall Street research analysts feels more like they are expecting a 10% loss.

Published in Eq: Large Cap
Thursday, 05 September 2019 17:05

Walmart’s Latest Move Could Really Boost Its Stock

(New York)

Walmart did something a lot of conservatives may not like this week—they announced that they would stop selling ammunition for assault weapons. Despite the political turbulence it may cause for the company, it could have a bullish effect on the stock in the long run. The reason why might not be obvious at first glance, but immediately becomes so once you hear it—the ban on assault weapons ammunition will give the company a higher ESG score, which means it may be included in more funds by default, and thus see increased buying.


FINSUM: Whatever your politics on this move, from an investment perspective this could be bullish.

Published in Eq: Large Cap
Wednesday, 21 August 2019 13:07

A Pillar of this Bull Market is Almost Dead

(New York)

Name the two main factors which drove this decade-long bull market. Ours would be the Fed’s easy policy, and huge levels of corporate buybacks. Well, that second one, which has inarguably been at least a core pillar of the bull run, is ending. Companies are pulling away from share buybacks, lessening one of the big price drivers for the market. Buybacks have slipped alongside the market’s trouble, as companies are no longer stepping in to buy shares, sending buybacks to their lowest level in 18 months.


FINSUM: Do you remember the earnings recession that occurred for a few years during this bull market? Buybacks are what kept prices afloat.

Published in Eq: Dividends

(New York)

Want to know one of the biggest risks in equity markets right now—parity, and we don’t mean between asset classes, we mean between investors’ portfolios. Momentum buying, or buying up stocks that have performed the best, has become such a hot strategy this year that both mutual fund holdings and hedge fund holdings look very similar. Everyone has the same basket of stocks, such as Mastercard, Paypal, Amazon, and Microsoft.


FINSUM: Since value investing has all but died—no one is interested in undervalued stocks—portfolio parity is increasing. This seems like a big risk that will magnify a reversal.

Published in Eq: Large Cap
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