01/06/2022 16:30
The Milanese sim focuses on “solid companies with strong pricing power, limiting bets on cyclical or low-quality stocks”
The markets filed the month of May with the global lists recording a stable performance overall (global equities + 1%, -13% YTD). A recovery mainly due to the rebound in the last days of the month and driven by an oversold condition and hopes that a dovish Fed (therefore with more dovish tones) that will go in support of the markets, in addition to the expectations of new potential economic support in China and reopening in Shanghai. However, the new month started with caution, in a scenario in which we constantly look at the theme of inflation which, according to various operators, may not have yet reached its maximum peak.
Equita and its constructive view on equity
Despite the uncertainties, Equita remains positive on Piazza Affari. “An already very cautious positioning of investors, market valuations that are already pricing in a marked economic slowdown (price / earnings ratio forecast in 2023 on the S & P500 index at 16.7 times, dropped below the average of the last 5 years by 17.5 times and in line with the 10-year one) and the belief that central banks do not want to trigger a recession and are therefore ready to intervene again to contain the increase in rates if the situation requires it, lead us to confirm our constructive view on equity“, explains Luigi De Bellis, co-manager of the Equita Sim research officepresenting the “monthly report“Of the Milanese sim entitled” Low quality rebound, crucial stock picking “.
Presenting its monthly view, Equita underlines that in the short term the markets remain fragile and the macro picture highly uncertain due to the conflict. Precisely in light of this context, the sim has decided to maintain only a slight overweight in the recommended portfolio compared to the benchmark (weight invested 91.7% from 91.2% in the previous month compared to the neutral weight 90%) and continues to focus “on solid companies with strong pricing power, limiting bets on very cyclical or low quality stocks “. In particular, it focuses on 5 stocks: FinecoBank, Moncler, Campari, DiaSorin, Intesa Sanpaolo. And then he specifies: “In our opinion, the correction of several high-quality stocks – mainly driven by de-rating of multiples due to rate hikes and strong positioning by investors – represents an opportunity.“.
Equita increases the weight in the portfolio of DiaSorin, Enel and Moncler
Equita increases the weight in the portfolio on DiaSorin (overall overweight of 270 basis points), strengthening the positive view on the stock in the wake of the “quality of the stock in a structurally growing market and with a management team of primary standing” but also for the “rich pipeline of innovative products that improves visibility on the growth profile of the group and offers potential upside on estimates “. The weight in the portfolio of Enel for which analysts expect “a second half with an improvement in operating results thanks to high energy prices, retail repricing and Latam growth”.
Equita eventually increases the weight of Moncler in the portfolio after weak performance in the month and on the back of recent support elements in the sector relative to the US market and the management of the pandemic in China. “Moncler offers an attractive combination of business quality, pricing power, earnings momentum, solid growth drivers (development of Stone Island, continuous expansion of the offering and the network for Moncler)”, indicate from Equita.