With the market correction unfolding, we have reviewed our investment theme lists and extracted stocks that offer interesting upside potential in the current changing environment. These lists contains promising opportunities for 2014 and into 2015 and are most often based on longer-term trend shaping the future global economy.
Investment theme: Industrial – Part 1
Based on a better macro environment, industrial activity is looking up; this is supported by the leading indicators coming out of the US and Europe. In general, seasonal fluctuations offer good buying opportunities.
Favorites:
| Company | Ticker | Sub-Sector | Upside Potential | Sharpe (FY01) |
| Lennar | LEN | Home Building | 12.98 % | 3.3 |
| Investment case: Lennar is able to capitalize on the improvement in land selling prices. LEN’s Q1 earnings and revenue surged as deliveries and selling prices improved; this trend should continue. | ||||
| Company | Ticker | Sub-Sector | Upside Potential | Sharpe (FY01) |
| Lennar | LEN | Home Building | 12.98 % | 3.3 |
| Investment case: Lennar is able to capitalize on the improvement in land selling prices. LEN’s Q1 earnings and revenue surged as deliveries and selling prices improved; this trend should continue. | ||||
| Company | Ticker | Sub-Sector | Upside Potential | Sharpe (FY01) |
| Lennar | LEN | Home Building | 12.98 % | 3.3 |
| Investment case: Lennar is able to capitalize on the improvement in land selling prices. LEN’s Q1 earnings and revenue surged as deliveries and selling prices improved; this trend should continue. | ||||
| Company | Ticker | Sub-Sector | Upside Potential | Sharpe (FY01) |
| Mohawak Industries | MHK | Manufacturing | 16.85 % | 4.41 |
| Investment case: Better than expected revenues are driving EPS outperformance.This, coupled with strong balance favoring future growth opportunities, offers investors a good opportunity. Mohawk was added to the S&P 500 at the end of last year. | ||||
| Company | Ticker | Sub-Sector | Upside Potential | Sharpe (FY01) |
| US Steel | X | Manufacturing | 11.66 % | 3.02 |
| Investment case: X is a turnaround story.Strong demand from the automobile sector is improving the company’s picture. | ||||
| Company | Ticker | Sub-Sector | Upside Potential | Sharpe (FY01) |
| US Steel | X | Manufacturing | 11.66 % | 3.02 |
| Investment case: X is a turnaround story.Strong demand from the automobile sector is improving the company’s picture. | ||||
| Company | Ticker | Sub-Sector | Upside Potential | Sharpe (FY01) |
| BHP Billiton | BLT | Materials | 16.80 % | 4.78 |
| Investment case: The last years’ restructurings are now expected to show up through improvements in the accounts. Iron ore shipment volumes are better than estimated. BLT could surprise the market with the announcement of a share repurchase programme. | ||||
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