YWR: Global Factor Model
Smart YWR Reader: “Hey Erik. I liked Green Pickle Situation #2. I’m positive on Chinese stocks too. No one talks about it, but Chinese monetary policy has been easing for some time. This is going to filter through into higher Chinese earnings estimates. Just wait.
May’s edition of the YWR Global Factor Model just hit the stands and the standout trend this month is the number of Chinese stocks in the YWR 300. There were 104 Chinese stocks at the top of the list, up from 37 January.
This makes China the biggest country allocation by far due to its combination of high earnings momentum and low valuations.
On the industry side there is a been a drop off in banks making the list. Earnings momentum in the banks is slowing incrementally. It’s still the top sector though. The big up and comers are Utilities, (which nobody owns) and Pharma. We’ve spoken before about the trends in Airlines, Autos and Insurance.
Here are the top 20 ranked stocks globally.
The momentum in utilities is interesting because it is a sector which gets very little interest. As we saw in Killer Charts yesterday US Hedge fund interest in utilities is close to zero. Only Real Estate is worse.