Our Equity Top Pick List
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Our Equity Top Pick List
We have updated our Equity Top Pick List to reflect the events of the past quarter. The list includes those stocks, typically US and European ones, that we consider to be proper investment choices from a fundamental point of view. It can provide a starting point for building a sector-diversified equity exposure in portfolios, but can also be used as a watch list. Technical analysis should be used to time / determine the specific investment decision.
Could the momentum return in the semiconductors?
The semiconductor sector has had a challenging quarter, with its performance in recent months lagging behind improvements in underlying fundamentals, even as AI-driven demand remained exceptionally strong. The accelerating adoption of AI by enterprises and the proliferation of AI agents are significantly increasing the demand for computing capacity, which points to a further surge in cloud services and data center investments. Given current supply constraints, record-high backlogs, and higher-than-expected investment needs, we expect further upward revisions to earnings forecasts in the semiconductor industry. Nevertheless, the sector’s valuation appears favorable from a historical perspective, which, in our view, could result in a more attractive risk-return profile in the coming months.
Our latest Investment Strategy recommends an overall neutral exposure to the equity asset class over the next 6-12 months. We believe this should be taken into account when making investment decisions in individual equities (the timing of investments or the size of positions).
The list includes those stocks, typically US and European ones, that we consider to be proper investment choices from a fundamental point of view. At the sector level, we examine the relative position of each stock on the basis of indicators (like valuation, profit growth prospects, indebtedness, quality), and then, after an individual analysis of the best performers, we select the companies we consider most attractive from a risk/return perspective.
Given the fundamental selection process, the stocks on the list should be treated as longer-term investment opportunities, but are reviewed on a quarterly basis to check whether the stock is on track with our original expectations or whether there is a sector peer with a better risk/return profile. The list can provide a starting point for building a sector-diversified equity exposure in portfolios, but can also be used as a watch list. In the latter case, the technical analysis methodology should be used to time/determine the specific investment decision. This is the purpose of our Trading Ideas report, which will also provide a specific trading strategy for the stocks on the list, if indicated.
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