In today's Global Equity Strategy report by Morgan Stanley, the bank released its 10 most favored global stocks.
The list consists of a few pharmaceutical companies, banks, and oil exploration companies, among others. Adam Parker, Chief US Equity Strategist and two other Morgan Stanley economists are responsible for the report.
Morgan used eight different variables to rank the mega cap stocks:
1. What's In the Price: They use a proprietary tool to forecast long-term growth.
2. 5-Factor Model: Price-to-book, year-over-year changes in return on equity, earnings revisions, dividend yield, and 6-month price momentum.
3. Bull/Bear Ratio: The upside and downside are compared.
4. MS Analyst Rating: They use their fundamental analyst's rating of the stock.
5. Percentile Price-to-Forward Earnings vs. History: The stocks are compared to their historical valuation and are sorted on the percentile against their own history.
6. Percentage of Revenues from Emerging Markets: They integrate revenue exposure to emerging markets.
7. Free Cash Flow Yield: The cash generating ability of the stocks are measured as a proxy for how the cash should be deployed.
8. Year-over-Year of CapEx-to-Sales: They differentiate between high and low capital spenders.
Wells Fargo
Ticker: WFC
Market Cap: $169,913
What Ranked High: Wells Fargo ranked near the top of the "What's in the Price," 5-Factors, and Emerging Market Exposure variables.
Wells Fargo provides commercial and corporate banking services in the United States. It was founded and is headquartered in San Francisco, California.
Source: Morgan Stanley
Sanofi S.A.
Ticker: 567173
Market Cap: $79,837
What Ranked High: Sanofi ranked near the top of the "What's in the Price," Bull/Bear Ratio, and Free Cash Flow Yield variables.
Sanofi engages in the research, development, and manufacturing of pharmaceutical products. It was founded and is based in Paris, France.
Source: Morgan Stanley
Hyundai Motor
Ticker: 645105
Market Cap ($M): $31,977
What Ranked High: Hyundai ranked near the top of the "What's in the Price," 5-Factors, and Bull/Bear Ratio variables.
Hyundai is a multinational automaker. It was founded in 1967 and is based in Seoul, South Korea.
Source: Morgan Stanley
See the rest of the story at Business Insider
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