YWR Factor Model
It’s our monthly analysis of over 3,000 global stocks where we discern new earning trends and identify stocks which combine positive estimate momentum with attractive valuations.
The full database with rankings is at the bottom of the post.
YWR Global Top 20
The China trend continues with lots of insurance companies and brokers. The model likes that Chinese insurance companies trade on P/E’s of 3-4x.
Greentown China Holdings
Red alert here. A Chinese property company is at the top of the list for estimate momentum. This is another data point, along with the Swire sales announcement that property in China might be turning the corner. If so, this has big implications for the stock market in 2025. Are Chinese property stocks a buy here? We highlighted Swire before in Trying to be more like Australia Dave.
Asustec
This $14bn Taiwanese laptop maker doesn’t get much attention, but maybe you’ve noticed the brand, ‘ASUS’. They’ve also been gobbling up market share in gaming PC’s with their ROG (Republic of Games) brand which has 30% market share!
Asustec are even launching ROG mobile phones for gamers who want gaming designed mobile phones. Asustec might also be a way to play the AI upgrade cycle as AI is added to laptops and phones and we all want the cool new products.
Revenues are growing and margins expanding.
American Airlines
Airlines are showing positive estimate revision and it makes sense. Airlines are a great beneficiary of the multi-year production problems at Boeing. Seat capacity will remain tight for years.
If you think about it, airline flights, along with mobile phone plans, are highly underpriced. If a lift ticket at Jackson Hole can be $269, and a hamburger at the airport can cost $30, then the flight from NYC to to London can be $3,000.
On the negative side airlines still aren’t great businesses, have thin margins and a lot of debt from the COVID years. I like easyJet’s strategy to build an online travel business alongside their airline.
What happened to Turkey?
At the end of 2023 the global factor model was chock full of oTurkish stocks with P/E’s of 3x, but then gradually Turkey dropped off the top of the list.
What happened?
Below is the YWR Global Factor Model from December 2023.
50% overnight lending rates is what happened.
Between April 2023 and May 2024 the central bank raised the overnight rate from 10% to 50%! This caught out all the millions retail traders playing stocks on margin. Retail traders and domestic funds switched from stocks to cash. But that may be changing in 2025.
You might not have noticed, but while you were opening your Christmas presents the Turkish central bank was cutting rates 250bps. A Christmas present for the Turkish stock market. This could be a wake up call for Turkish stocks again, which are still historically cheap. Here is a list of Turkey ADR’s.
High Estimate with Low Price Momentum
I upload all the monthly Factor Model data to a Tableau dashboard to graphically represent interesting set ups, like a scatter chart of stocks with high estimate momentum, but low price momentum (haven’t moved yet).
Micron and Softbank stand out.
A link to the Tableau dashboard is at the bottom of the post.
Top 5 Sectors
Out of the top 300 ranked stocks, the sectors with the highest representation are Banks, Brokers (these are Chinese brokers), Software, Shipping and Utilities.
When we just look at earnings momentum (and leave out the valuation component of the score) we see Precious Metals and Shipping have the best momentum.
But then further down the list look at how many insurance sub-categories have strong earnings momentum. Life/Health, Property/Casualty, Insurance Brokers.
This table is from the Tableau Dashboard and you can click into each bar to see the individual stocks driving the scores.
When we look at the monthly trends we see the rise of Chinese brokers and Marine Shipping. Can you imagine buying Guotai Junan Securities (2611 HK)?
Country Level Trends
China and the US continue to be the countries with the highest number of top ranked stocks. Canada has been screening well thanks to its high number of precious metals listings.
It’s amazing to see the UK on the top 5 list. You can filter the database to see which UK stocks are driving this, but it includes the UK banks, British Airways (International Consolidated Airlines) and easyJet.
It’s interesting that Japan is consistently in the top 5 countries globally, but doesn’t get much attention.
Taiwan dropped out of the Top 5.
Below are links to:
The YWR Global Factor model for December
The YWR Receber Tableau Dashboard