Stocks are see-sawing — they surged in January after a bear market year, then tumbled last week. Investors are digesting U.S. inflation numbers, observing the the direction of consumer prices, and anticipating the size of a possible recession. As sentiment turns a little bearish, BofA screened for cheaper global stocks that proved resilient during the financial crisis of 2008. BofA strategist Paulina Strzelinska said in a Feb. 9 note that the 12-month forward price to earnings ratio for European stocks is at 11.9x — in line with the long-term average. European stocks got 18% pricier since the market trough in October, she said. But there are still inexpensive corners of the market, she added, naming consumer staples and utilities. Europe has been one of the brightest spots in the global stock market this year, with Wall Street calling the region a better bet than the U.S. right now . BofA screen BofA screened for European stocks that met the following criteria: Inexpensive compared with the past 15 years’ average 12-month forward price to earnings ratio. Positive earnings per share between 2007 and 2010. Less than the market median’s maximum drawdown during the financial crisis. The 17 stocks that turned up in BofA’s screen were mostly in health care, food and beverage, and utilities. Here are four of them: German pharmaceutical giant Bayer : Its stock, which is up around 23% in the year to date, jumped and hit an eight-month high last week after it announced former Roche executive Bill Anderson as its next CEO. According to FactSet, analysts covering the stock gave it average potential upside of around 23%, and 62% rated it a buy. U.K. company British American Tobacco : The world’s largest tobacco company last week forecast a small rise in earnings this year, but killed hopes of a share buyback. According to FactSet, analysts covering the stock gave it average potential upside of around 26%, and 78% rated it a buy. French utilities firm Engie : The firm, which has a renewable energy unit, is heavily endorsed by analysts — 93% of those who cover the stock gave it a buy rating. They also gave it 28% potential upside. British pharmaceutical firm GSK : Research firm Argus in a Feb. 10 note noted that GSK recently spun off its consumer health-care business, and will now focus on its pharmaceutical business. “We believe that the separation will help GSK to develop its pipeline, and expect it to drive cash flow generation and gains in the stock price,” it said, giving it a price target of $45 — or 25% potential upside. — CNBC’s Michael Bloom contributed to this report.
#BofA #stocks #weather #choppy #market #inexpensive
Share this:
- Click to share on Twitter (Opens in new window)
- Click to share on Facebook (Opens in new window)
- Click to email a link to a friend (Opens in new window)
- Click to share on LinkedIn (Opens in new window)
- Click to share on Tumblr (Opens in new window)
- Click to share on Pinterest (Opens in new window)
- Click to share on Telegram (Opens in new window)
- Click to share on WhatsApp (Opens in new window)