Although the rebound of US stocks in recent months is amazing, the performance of different stocks is actually very different, and almost all of the rally in the market is due to a small number of stocks. Therefore, a new consensus has been formed on Wall Street, that is, the US stock market is now an out-and-out stock market.
As we all know, by far, the brightest stars in the US stock market are mainly technology stocks, especially those of a small number of technology giants, but how long will the strength of these stocks last? Can they continue to play leading roles in the next market cycle?
According to Eduardo Lecubarri, JPMorgan Chase & Co's global head of small and medium-sized equity strategy, although the small and medium-sized stock index has also risen during the recovery in the past few months, overall, the pace of recovery in these companies is likely to make investors increasingly frustrated. Lakebari estimates that these indices may not be able to return to 2019 levels by the end of next year.
In other words, he thinks these indices will enter a period of volatility for quite a long time, which is actually good news for stock-picking investors.
In July, the global economy continued to recover and central banks continued to inject money into the system. "he explained," this situation will continue for another 18 months and more, but one in five of these small and medium-sized stocks is still down more than 30%! "
As a result, his strategy is largely to look for corporate stocks that are trading well below their highs at the start of the year, but whose real business has not been hit so hard.
Regionally, he is more bullish on countries such as Germany, Switzerland, Sweden, Finland and Ireland, while for equities, he recommends "stocks with strong balance sheets but cyclical hits".
However, the number of stocks that have plummeted is so large that investors will inevitably be picky in many regions and sectors. To this end, JPMorgan Chase & Co compiled a list of stocks with the greatest potential for growth traded on the US stock market. All of these small and medium-sized stocks have overweight ratings from the bank's analysts.
The prices of these stocks are all down at least 30% from their February peak, creating room for a future recovery. The ratio of net debt to earnings before interest, tax, depreciation and amortisation of these stocks is less than 3, which means that the balance sheet is fairly healthy and the debt burden is light. At the same time, the ratio of the corporate value of these stocks to earnings before interest, tax, depreciation and amortisation is no higher than 6, which means that the stock price is not expensive.
Here are the 19 potential small and medium-sized stocks, according to the difference between the target price and the current price determined by JPMorgan Chase & Co, that is, the ranking of potential rising space.
Plate: non-essential consumer goods
Industry: textiles, clothing and luxury goods
Market capitalization: $4.8 billion
Rising potential: 7%
18. $ProPetro Holding (PUMP.US) $
Plate: energy
Industry: energy equipment and services
Market capitalization: $580 million
Upside potential: 12%
17. $Magnolia Oil & Gas Corp. (MGY.US) $
Plate: energy
Industry: oil, natural gas and consumer fuel
Market capitalization: $1.6 billion
Upside potential: 17%
Plate: energy
Industry: oil, natural gas and consumer fuel
Market capitalization: $1.64 billion
Upside potential: 26%
15. $Cimarex Energy Co. (XEC.US) $
Plate: energy
Industry: oil, natural gas and consumer fuel
Market capitalization: $2.6 billion
Upside potential: 31%
Plate: energy
Industry: oil, natural gas and consumer fuel
Market capitalization: $4.2 billion
Rising potential: 37%
13. $Rattler Midstream Partners LP (RTLR.US) $
Plate: energy
Industry: oil, natural gas and consumer fuel
Market capitalization: $353 million
Rising potential: 40%
12. $United States Cellular Corp. (USM.US) $
Plate: communication services
Industry: wireless telecommunications services
Market capitalization: $2.6 billion
Upside potential: 42%
Plate: essential consumer goods
Industry: food
Market capitalization: $506 million
Upside potential: 44%
Plate: energy
Industry: oil, natural gas and consumer fuel
Market capitalization: $4.6 billion
Rising potential: 46%
9.$telephone and data system (TDS.US) $
Plate: communication services
Industry: wireless telecommunications services
Market capitalization: $2.3 billion
Upside potential: 49%
8. $Laureate Education, Inc. (LAUR.US) $
Plate: non-essential consumer goods
Industry: diversified consumer services
Market capitalization: $2.5 billion
Upside potential: 50%
Plate: energy
Industry: oil, natural gas and consumer fuel
Market capitalization: $3.3 billion
Upside potential: 51%
6. Alaska Aviation Group Limited (ALK.US) $
Plate: industry
Industry: aviation
Market capitalization: $4.3 billion
Upside potential: 60%
5. $MONTAGE RESOURCES CORPORATION (MR.US) $
Plate: energy
Industry: oil, natural gas and consumer fuel
Market capitalization: $182 million
Room for growth: 63%
4. $National Energy Services Reunited Corp. (NESR.US) $
Plate: energy
Industry: energy equipment and services
Market capitalization: $635 million
Upside potential: 64%
3. $GrafTech International Ltd. (EAF.US) $
Plate: industry
Industry: electronic equipment
Market capitalization: $1.7 billion
Upside potential: 73%
2. $NEXTIER OILFIELD SOLUTIONS INC (NEX.US) $
Plate: energy
Industry: energy equipment and services
Market capitalization: $599 million
Upside potential: 98%
1. $Hollysys Automation Technologies Ltd (HOLI.US) $
Plate: information technology
Industry: electronic equipment, instruments and parts
Market capitalization: $736 million
Rising potential: 107%
Edit / Phoebe