eyeQ: 10 actionable trading signals for week beginning 16 September 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 September 2024 10:35
by Huw Roberts from eyeQ
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"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 |
| Wetherspoon (J D) (LSE:JDW) | 67% | 785.26p | -10.44% |
| Savills (LSE:SVS) | 80% | 1262.62p | -7.92% |
| easyJet (LSE:EZJ) | 72% | 514.56p | -4.80% |
| Persimmon (LSE:PSN) | 84% | 1713.28p | -4.50% |
| BP (LSE:BP.) | 70% | 417.73p | -3.35% |
| Big Yellow Group (LSE:BYG) | 68% | 1306.80p | 2.18% |
| Inchcape (LSE:INCH) | 68% | 803.99p | 2.31% |
| Land Securities Group (LSE:LAND) | 66% | 656.09p | 2.87% |
| ITV (LSE:ITV) | 82% | 76.95p | 3.69% |
| Playtech (LSE:PTEC) | 79% | 623.44p | 4.67% |
Source: eyeQ. Long-Term strategic models. Data correct as at 15 September 2024.
ITV
The way we consume media is changing, gone are the days when sitting on the sofa in front of the TV is the way to absorb content. Legacy media is changing and we have seen in recent years the rise of streaming channels such as Netflix, YouTube and Google+.
However, old guards such as ITV (LSE:ITV) are still holding on thanks to digital advertising, particularly through its streaming platform ITVX. But, the big question is: can it make the necessary moves at the right time and fast enough to adapt?
eyeQ’s smart machine gives ITV a macro relevance score of 82% - investors need to pay close attention to the big picture stuff. In the last month, model value has improved by 4.88% but the model hasn’t done much in September – it’s moved sideways and appears to be awaiting new direction.
The stock finds itself slightly rich to overall macro conditions but is essentially trading where overall macro conditions say it should. For now, the bigger issue is awaiting evidence of a new macro trend for the stock.
International top 10
| Company | Macro Relevance | Model Value | Fair Value Gap |
| General Motors Co (NYSE:GM) | 86% | $48.29 | -4.29% |
| Target Corp (NYSE:TGT) | 80% | $157.02 | -3.74% |
| Uber Technologies Inc (NYSE:UBER) | 71% | $75.09 | -3.61% |
| Adobe Inc (NASDAQ:ADBE) | 87% | $557.97 | -3.93% |
| Bank of New York Mellon Corp (NYSE:BK) | 88% | $70.61 | -2.77% |
| The Home Depot Inc (NYSE:HD) | 74% | $375.52 | 1.18% |
| JetBlue Airways Corp (NASDAQ:JBLU) | 74% | $5.81 | 2.27% |
| Pfizer Inc (NYSE:PFE) | 69% | $28.23 | 3.55% |
| General Mills Inc (NYSE:GIS) | 69% | $69.52 | 5.68% |
| eBay Inc (NASDAQ:EBAY) | 81% | $58.28 | 8.14% |
Source: eyeQ. Long-Term strategic models. Data correct as at 15 September 2024.
General Motors
Uber and General Motors Co (NYSE:GM)’s Cruise – the autonomous car maker – have agreed to a multi-year partnership under which the embattled robocar will provide driverless rides to Uber rides as soon as next year.
Moreover, GM’s progress in the EV industry has been remarkable. The car manufacturer delivered 22% more EVs in Q2, representing 40% year-over-year growth.
eyeQ’s macro relevance score is 86%, which tells you that macro is an important driver of the stock price.
The stock is currently sitting at 4.29% cheap to overall macro conditions; it has lagged the 5.97% improvement in the stock price over the last month. That’s not yet enough to fire a bullish signal but with the Federal Reserve meeting this week, this macro-driven stock could be one to watch.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
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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