YWR: Global Factor Model
What new themes are bubbling up in the data?
Or, what themes are staring us in the face, but we don’t appreciate what’s going on?
It’s why we review the Global Factor Model each month, and why we’ve built so many tools around estimate revision insights.
Links to all the tools are at the bottom of the post.
Factor model rankings for over 3,000 global stocks
Tableau Dashboard
Factor Model Data App on Retool
If you don’t understand the importance and psychology behind estimate revisions I wrote about it in ‘Why Estimate Revisions Work’.
Now let’s get to work.
YWR Top 25
SCOR: The positive momentum here is a combination of strong insurance pricing, volume growth and the bond portfolio reinvesting at higher interest rates. Many of the same themes benefitting Swiss Re and insurance in general. There might be a bigger theme around improved profitability in Life & Health for the industry (Swiss RE also talked about this), but I haven’t done the work.
Equinox and Gold Fields: benefitting from the trend in gold. I also like the story at Anglo Gold Ashanti. I’ll put a link to the updated model in at the bottom.
Sumitomo Rubber: thank you Steve for the great insight on why Rubber prices are going higher (The Unintended upside in Rubber).
Emaar Dev: The rise of Dubai and global tax avoidance on a P/E of 5x.
Iveco: Backdoor European defence stock at 7x if you need it. Thyssen is another one.
Societe General, Barclays: How high can they go? Nobody knows. Estimate revisions are positive and 2026 P/E’s < 7x. In Tuesday’s Killer Charts we explored the possibility of European banks trading on 10x. We own Barclays in Dirty Dividends, but Societe General also looks good… nobody owns SocGen.
Industry Trends
The top 5 ranked sectors for a combination of earnings revisions, valuation and price momentum are banks, software, pharmaceuticals, gold miners, and biotech.
I get banks and precious metals.
But I’m not sure what is going on with Pharma and Biotech.
What’s the story here?
I’d love to hear from anyone if these are one-off company stories or there is an underlying theme. You can go through the rankings file and filter by industry. For example, TG Therapeutics?
What about packaged software?
I see a great trend emerging in Packaged Software, but it’s for a future post. If you go to the Tableau dashboard and click in by industry you can see what is scoring well. It relates to why Internet Retail is also scoring so well.
In the monthly trends below we see how biotech has been steadily gaining traction month by month. It’s not a sector most people own. We bought some Inmune Bio last year (The 20x upside in Inmune Bio) and are still holding it.
Packaged Software has also been steadily rising month by month.
Country level trends
The US is always well represented on # of stocks because it has so many, so we have to look at relative trends.
China ranks at #2 in the world, which is painful because nobody owns it.
‘The other China’ made the top 5 too. You know … the other market everyone hates and won’t own…. the UK. UK banks are screaming higher (BARC, LLOY, STAN) and are cheap, so the factor model loves them, even if nobody else does.
And South Korea!!!! It’s contrarian, but we love South Korea. It was screening well all of last year so we bought the ETF at the end of 2024 (Who am I ETF?). One of the great stocks in South Korea is SK Hynix, a leading memory chip fab beating #’s on a P/E of 5x.
Another S. Korea stock which might be interesting is Coupang ($CPNG), the Amazon of South Korea. Bouncing along, -50% from the highs, nobody talking about it or caring, and yet good Q4 results and beating #’s.
When we look at the monthly trends the only thing which really sticks out to me is the pick up in South Korea and that China, South Korea and Japan are all in the top 5. Usually Taiwan is too, which is why we have been gradually pivoting Dirty Dividends to Asia.
Below are links to all the resources. Get a coffee, dig in and let me know what you find.
Factor model rankings for 3,000 stocks
Tableau Dashboard to visualise sector level data
Factor Model Data app to quickly visualise estimate revisions.
AngloGold Ashanti model with updated YWR forecasts.