eyeQ: 10 actionable trading signals for week beginning 16 December 2024
Experts at eyeQ use AI and their own smart machine to generate actionable trading signals. Here, they highlight 10 UK shares and 10 overseas stocks either cheap or expensive given current macro conditions.
16th December 2024 10:22
by Huw Roberts from eyeQ
"Our signals are crafted through macro-valuation, trend analysis, and meticulous back-testing. This combination ensures a comprehensive evaluation of an asset's value, market conditions, and historical performance." eyeQ
- Discover: eyeQ analysis explained | eyeQ: our smart machine in action | Glossary
This series of weekly articles uses eyeQ’s smart machine to highlight 10 stocks whose share price trades at either a discount or premium to eyeQ’s Model Value price (where macro conditions say the share 'should' trade).
A minus figure in these tables indicates a share trading below eyeQ’s Model Value, implying they are ‘cheap’ versus macro conditions. A plus figure screens as rich because the current share price is above eyeQ’s Model Value.
All companies must have a model relevance above 65%, which means the macro environment is critical and any valuation signals carry strong weight.
Here are definitions of terms used in the analysis:
Model value
Where our smart machine calculates that any stock market index, single stock or exchange-traded fund (ETF) should be priced (the fair value) given the overall macroeconomic environment.
Model relevance
How confident we are in the model value. The higher the number the better! Above 65% means the macro environment is critical, so any valuation signals carry strong weight. Below 65%, we deem that something other than macro is driving the price.
Fair Value Gap (FVG)
The difference between our model value (fair value) and where the price currently is. A positive Fair Value Gap means the security is above the model value, which we refer to as “rich”. A negative FVG means that it's cheap. The bigger the FVG, the bigger the dislocation and therefore a better entry level for trades.
Long Term model
This model looks at share prices over the last 12 months, captures the company’s relationship with growth, inflation, currency shifts, central bank policy etc and calculates our key results - model value, model relevance, Fair Value Gap.
UK Top 10
Company | Macro Relevance | Model Value | Fair Value Gap |
79% | 1523.43p | -14.59% | |
73% | 680.37p | -13.21% | |
71% | 147.41p | -6.82% | |
67% | 194.46p | -6.20% | |
76% | 238.01p | -3.26% | |
77% | 229.78p | 1.04% | |
83% | 386.48p | 2.39% | |
70% | 1119.86p | 2.62% | |
73% | 1808.66p | 2.71% | |
78% | 72.72p | 20.00% |
Source: eyeQ. Long Term tactical models. Data correct as at 15 December 2024.
Grainger
While private landlords were hurt by the latest UK Budget, corporate landlords managed to carve out several exemptions from onerous new taxes and regulations. That suggests Grainger (LSE:GRI), believed to be the biggest corporate landlord in England, could be a beneficiary.
On eyeQ, Grainger's macro relevance score is high and stable, so this is a macro-driven stock. Model value has bounced back after it fell to a one-year low at the end of November. It now sits at 239.89p.
The stock is 3.26% cheap to overall macro conditions. That gap isn’t big enough to generate a signal yet, but there are promising signs suggesting this is a stock to keep an eye on.
International top 10
Company | Macro Relevance | Model Value | Fair Value Gap |
76% | $142.56 | -20.43% | |
78% | $122.40 | -19.41% | |
67% | $30.72 | -7.12% | |
66% | $86.87 | -5.95% | |
67% | $157.14 | -2.12% | |
70% | $428.56 | 1.95% | |
70% | $217.82 | 4.24% | |
70% | $14.93 | 8.10% | |
68% | $64.88 | 23.18% | |
68% | $304.74 | 30.14% |
Source: eyeQ. Long Term tactical models. Data correct as at 15 December 2024.
Micron Technology
Micron Technology Inc (NASDAQ:MU)’s stock performance in 2024 was a roller coaster. The company saw its share price rise by 80% at the start of the year before losing a substantial amount of those gain mid-year.
The company is set to report its earnings on Wednesday, and analysts believe the chipmaker will beat consensus estimates. Micron is poised to benefit from the growing demand for memory chips and an improvement in the supply-demand dynamic in the memory chip market.
Macro relevance is at 78% - for investors this means macro plays a big role in the stock. The machine has fired a bullish signal with the stock currently sitting 19.21% under eyeQ model value.
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Disclosure
We use a combination of fundamental and technical analysis in forming our view as to the valuation and prospects of an investment. Where relevant we have set out those particular matters we think are important in the above article, but further detail can be found here.
Please note that our article on this investment should not be considered to be a regular publication.
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