Head of Equity Strategy
For a complete list of five-year price charts for all stocks in Saxo's 2018 Equity World Cup, click here.
In our Saxo Equity World Cup introduction we explained the rules and structure of the game. In addition we made a prediction for the whole tournament based on which stock we believe has the best odds. We based our prediction on the momentum factor alone.
As Ecopetrol had the highest momentum, we went with a prediction that Colombia would win the Saxo Equity World Cup. But what is the result if we compare the companies in our global equity factor model? Of the 32 companies, only 16 are part of our model. Interestingly enough 14 out 16 companies have a positive score which means that they score above average in our global equity universe consisting of ~1,700 stocks.
The best company representing a country in our Saxo Equity World Cup is Novo Nordisk with a total score of 0.72, which is such a high score that Novo Nordisk is among the top 10 most attractive stocks in the world according to our model. Novo Nordisk’s high score is driven by the highest quality score of +3, indicating that the company’s return on capital is the best among all the ~1,700 companies.
In addition, Novo Nordisk scores high on the leverage factor (negative net debt and thus zero interest rate sensitivity) and the reversal factor, indicating significant underperformance in the past month. The reversal factor is based on the fact that the stocks that decline the most in the short term are also the ones to subsequently rise the most relative to other stocks.
As the chart below shows, Novo Nordisk has not regained its footing since the declines seen in February as investors doubt the earnings power in the US segment given persistent pricing pressure on insulin. Recent rumours are circulating that Novo Nordisk is considering cutting 3,000 jobs to remain competitive in the US market which would be the ultimate sign that management has lowered their long-term outlook on the US market. However, for the long-term investor, the Novo Nordisk investment case remain intact as diabetes is likely to grow as wealth grows and Western living standards emerge in developing countries.
A new fragmented world order can render some of today's infrastructure obselete, but it also calls for massive new investments across the globe, which requires a new set of strategic and tactical investment strategies.
Steen Jakobsen,
Chief Investment Officer
As globalisation turns to fragmentation, China seems set on playing a role in the global economy, while simultaneously working towards proofing its own economic situation from external shocks and crises.
Redmond Wong,
Market Strategist
The recent bank runs and ensuing challenges are reminicent of something we've seen before. Will it end like the S&L crises of 1986 and 1995?
Chris Dembik,
Head of Macroeconomic Research
Equity markets need to recalibrate to another - fragmented - global world. What's your view on equities in this market - are they going up or down?
Peter Garnry,
Head of Equity Strategy
With every development comes new opportunites, some of which could be in India. Have you considered the country as a part of your diversification strategy?
Charu Chanana,
Market Strategist
A collar is an option strategy that allows some protection while maintaining some upside potential. What investment would you like to use a collar strategy for?
Hans Oudshoorn,
Trainer Academy
There are arguments to be made for many commodities to have upside. Which are you paying the most attention to this quarter?
Ole S. Hansen,
Head of Commodity Strategy
In a very challenging macro environment, which currencies do you think will come out on top?
John J. Hardy,
Head of FX Strategy
