Recession proof stockpicking

Attractive valuations should lead to price performance. This statement may be partially true in secular bull markets. But when markets fall for more than a year, we need more than attractive valuations to recession proof our investments. As good valuations necessarily don’t outperform and even if they do, there is no fast retribution. Things take more time in slowdowns. So how to pick stocks that can deliver in tough times?
In XTR INDICES, we lay down a complete step by step process to pick up the top picks. First and foremost, if a stock figures in the XTR 21, it has gone through a serious filtering on statistical, fundamental and sectoral aspects. If a stock is there, it has already been filtered once. Second, if the same stock figures in the free float index XTR 30, it passes through the tough tradability criterion. Third, we give you the late economic filter. Any stock from the materials, energy, staples, utilities, chemicals and Pharma suggest more insulation to tougher times. And even if globally we are witnessing pauses in the OIL upmove ( read the latest WAVES.OIL), the energy boom is far from over and Energy and Metals still have a few years of upside left. Fourth, if you still want to filter your stock shortlist a bit more, run the classic price and fundamental screens and you can rest assured that your final results will definitely conserve capital, if not make you rich. And the way we see markets evolving over the next two quarters, we see more of a profitable than a mere capital conservation strategy here.
We ran the steps for you and came with the following stocks AMO, AZO, VRANCART, ALU, PTR. If you add to them the Energy Major SNP and utility majors TGN and TEL, you have an eight stock portfolio that should weather all your recession storms for the next two quarters. If you take out TEL, all the rest have an average P/E multiple of around 12. All the respective stocks are from Late Economic Sector and are present in XTR 21. And half of them also pass the tough free float criterion of the XTR 30 Index. Now what’s left is conviction that such extreme filtering has more chances of success than failure.
The last week’s XTR INDICES performance highlights the XTR recession filtering yet again. XTR 21 was top Mid Cap performer at 10%. XTR 30 components topped the Small Cap category. On a month over month basis XTR 21 shined again with a 12% relative performance over the universe components. Our flagship Index XTR 21 is back near neutral territory for the year with relative gains of more than 50% above BETFI (the financial sector Index). COMI, TEL and COS breached the 10% performance screen for XTR 21. TEL also figured in the utility sector screen along with COVG and SCTO utility components. ATPA topped the discretionary sector. ATB topped Pharma sector screen. CEON, COS and AMO topped the materials screen. ARS, COMI, COBS and EPT topped the Industrials. PRAE was the staple outperformer. Another interesting and profitable week for recession proof stocks.
Enjoy the latest XTR INDICES
ORPHEUS ROMANIA RESEARCH
XTR.INDICES is our analytics product, which creates and manages Romanian market indices like XTR 21, XTR 100 and XTR 30 (Free Float). We also run models based on breadth indicators (Advance Decline ratio) and statistical parameters (correlations, betas, volatilities, top price changes, 200 day moving average etc.) XTR 21 – THE BLUE CHIP INDEX. REUTERS RICS COVERED.TRPS.BX, VNCA.BX, AMSL.BX, PEXI.BX, BATR.BX, ARTM.BX, COMI.BX, PTRI.BX, BRDX.BX, BRKU.BX, ARTM.BX, SNOS.BX, ARSB.BX, ALRO.BX, AZOM.BX, OTSP.BX, ALUM.BX, MOPN.BX, TSEL.BX, TGNM.BX XTR 100 – BROAD MARKET INDEX. XTR 30 – FREE FLOAT INDEX. XTR – EE (XTR EARLY ECONOMIC INDEX), XTR – ME (MID ECONOMIC SECTOR), XTR – LE (LATE ECONOMIC SECTOR)
ORPHEUS RESEARCH AT REUTERS – UNITED KINGDOM
ORPHEUS RESEARCH AT REUTERS – USA