eyeQ: 10 actionable trading signals for week beginning 23 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.
23rd December 2024 10:33
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 |
65% | 149.50p | -14.65% | |
88% | 1825.05p | -13.11% | |
77% | 867.47p | -9.74% | |
75% | 1440.84p | -7.85% | |
68% | 1127.15p | -7.55% | |
79% | 1410.31p | -6.84% | |
77% | 225.70p | -0.80% | |
84% | 372.40p | 1.75% | |
72% | 1794.62p | 1.88% | |
78% | 91.82p | 8.09% |
Source: eyeQ. Long Term tactical models. Data correct as at 20 December 2024.
Antofagasta
Commodity bulls take note - the Chilean copper mine is 13.1% cheap on eyeQ's models.
The broad macro environment has not been especially friendly of late. Our model value fell in September/October and has been flatlining since. So, it's not that the big-picture outlook is hugely constructive.
But Antofagasta (LSE:ANTO) has moved too low relative to prevailing macro conditions. That means for any investor wanting an inflation hedge, or maybe thinking Chinese growth will recover in 2025, we have an attractive entry level on a classic mining stock that's highly geared to the global economic cycle.
International Top 10
Company | Macro Relevance | Model Value | Fair Value Gap |
76% | $171.63 | -12.35% | |
69% | $76.55 | -11.91% | |
66% | $163.47 | -10.60% | |
74% | $26.02 | -8.93% | |
66% | € 93.66 | -2.61% | |
68% | $433.49 | 0.71% | |
71% | $219.59 | 2.37% | |
70% | € 600.02 | 4.47% | |
65% | $41.75 | 7.12% | |
70% | $375.64 | 10.79% |
Source: eyeQ. Long Term tactical models. Data correct as at 20 December 2024.
Electronic Arts
Video games company Electronic Arts Inc (NASDAQ:EA) has had a tough end to the year. The stock is down around 12% in December after some brokers downgraded their outlook.
eyeQ has no view on the company fundamentals, so readers need to do their own research to formulate their opinion on that side. But from a macro perspective the picture is different.
A 66% macro relevance means big-picture stuff such as growth and inflation is important. Model value has stopped rising, but still sits near recent highs. Put another way, the recent sell-off is not justified by macro conditions and that leaves the stock 10.6% cheap on our models.
These third-party research articles are provided by eyeQ (Quant Insight). interactive investor does not make any representation as to the completeness, accuracy or timeliness of the information provided, nor do we accept any liability for any losses, costs, liabilities or expenses that may arise directly or indirectly from your use of, or reliance on, the information (except where we have acted negligently, fraudulently or in wilful default in relation to the production or distribution of the information).
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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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