BofA’s global contenders and defenders list

BofA’s listed their global “contender and defender” stocks, a strategy that looks into earnings and price momentum.

The bottom-up stock selection model showed preference towards the global financials and technology sectors.

According to a Wednesday note, earnings and price momentum is most positive for banks, diversified financials (FNCL), semiconductors (SMH), (SOXX), insurance (KIE), (IAK), and tech hardware (HBGD:CA), and most negative for consumer staples (XLP), energy (XLE), and real estate (XLRE).

Contenders have more exposure to the momentum style with less risk, and defenders are more skewed towards risk, and have very low momentum.

Contenders are found by analyzing earnings momentum, price momentum and valuation investment strategies that are expected to outperform the MSCI AC World Index (NASDAQ:ACWI).

The global defenders are, on the other hand, expensive stocks with falling earnings momentum and price momentum that are not being de-rated.

Analysts said that “inexpensive stocks (low PE) with relatively strong earnings momentum that are not being de-rated, tend to outperform expensive (high PE) stocks with the same characteristics.”

The global contenders have outperformed the defenders by 19.3% year-to-date (20.2% vs. 0.9%), and the MSCI AC World Index (ACWI) by 5.5% (14.7%). Just last month, the global contenders outperformed the defenders by 2.8% and the world index (ACWI) by 0.2%.

The global contenders – 30 stocks with the lowest PE and above earnings and price momentum.

• CTBC Financial [Not covered]
• Kia [Not covered]
• MediaTek Inc. (OTCPK:MDTTF)
• Akbank (OTCQX:AKBTY)
• Novo Nordisk A/S (NVO)
• Pandora A/S (OTCPK:PNDZF)
• Rolls-Royce Holdings (OTCPK:RYCEY)
• Tesco PLC (OTCPK:TSCDF)
• Sumitomo Corp (OTCPK:SSUMF)
• Sumitomo Electric (OTCPK:SMTOF)
• Alphabet-A (GOOGL)
• AppLovin Corp. (APP)
• Arista Networks Inc. (ANET)
• Broadcom (AVGO)
• The Cigna Group (CI)
• D.R. Horton Inc. (DHI)
• DaVita Inc. (DVA)
• Eastman Chemical Co. (EMN)
• Equitable Holdings Inc. (EQH)
• Gen Digital Inc. (GEN)
• General Motors Co. (GM)
• JPMorgan Chase (JPM)
• KLA Corp. (KLAC)
• Meta Platforms Inc. (META)
• NetApp Inc. (NTAP)
• Owens & Minor Inc. (OMI)
• Prudential Financial Inc. (PRU)
• SS&C Technologies Holding Inc. (SSNC)
• Targa Resources Corp. (TRGP)
• Tyson Foods Inc. (TSN)

The global defenders – 30 stocks with the highest PE and below average earnings and price momentum.

• Bank Rakyat Indonesia (OTCPK:BKRKY)
• Galaxy Entertainment Group (OTCPK:GXYEF)
• Novatek (OTC:NSTKF)
• Grupo Financiero Banorte (OTCQX:GBOOY)
• Diageo Plc (DEO)
• Kering SA (OTCPK:PPRUF)
• NIBE Industrier (OTCPK:NDRBF)
• Sartorius Aktiengesellschaft Preference Shares (OTCPK:SUVPF)
• FANUC Corp. (OTCPK:FANUY)
• Oriental Land Co. (OTCPK:OLCLY)
• Aon Plc (AON)
• Bio-Techne Corp. (TECH)
• Brown-Forman Corp. (BF.B)
• Caesars Entertainment Inc. (CZR)
• Chevron Corp. (CVX)
• First Quantum Minerals (OTCPK:FQVLF)
• Franklin Resources Inc. (BEN)
• Huntington Bancshares Inc. (HBAN)
• Intel Corp. (INTC)
• Interpublic Group (IPG)
• Keysight Technologies Inc. (KEYS)
• Knight-Swift Transportation Holdings Inc. (KNX)
• Lattice Semiconductor Corp. (LSCC)
• Match Group Inc. (MTCH)
• MongoDB Inc. (MDB)
• Old Dominion Freight Line Inc. (ODFL)
• Repligen Corp. (RGEN)
• Snowflake Inc. (SNOW)
• Teledyne Technologies Inc. (TDY)
• Tesla Inc. (TSLA)