eyeQ: Shell and BP – which one is the better bet?
Experts at eyeQ have used AI and their own smart machine to analyse macro conditions and generate actionable trading signals. This time it studies two popular oil stocks.
4th November 2024 13:41
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
BP
Macro Relevance: 80%
Model Value: 406.47p
Fair Value Gap: -6.1% discount to model value
Shell
Macro Relevance: 59%
Model Value: 2784.73p
Fair Value Gap: -7.4 % discount to model value
Data correct as at 4 November 2024. Please click glossary for explanation of terms. Long-term strategic model.
Here are some definitions of useful terms used in this video:
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.
The transcript for this video is available in the description on YouTube here.
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