Value as a style with structured solutions

A combination of factors (reduction of uncertainty around the US election, optimism on the recent news of the Covid19 vaccine and a steepening of the yield curve) has been the trigger for an increasing interest for value areas of the economy. In our view, this trend has sufficient reasons to continue in the short term, although we continue to believe in some growth areas of the economy as well.

“Value” is, however, an opportunity in a much broader context. Investors may consider including “value” in their portfolio to provide diversification and return potential for the short term. Structured products can be handy for investors looking for a combined solution.

Value Trade with our Swiss stock selection

• LafargeHolcim: LafargeHolcim is a market leader in cement. Developing markets account for 50% of total sales with the majority of important countries seeing increasing needs in infrastructure in the medium term. The company has a strong balance sheet and an increasing cash generation.
• OC Oerlikon Corp: OC Oerllikon strives to become a surface technology powerhouse and a global leader in coating technologies. The diversity of applications and end-markets provide attractive long term structural revenue growth opportunities.
• Sulzer: With 47% of sales in the oil & gas sector, Sulzer can be regarded as oil-sensitive and late-cyclical stock. The company announced not only an ambitious restructuring program to optimize costs but also accelerated M&A activities.

Value Trade with our European stock selection

• BNP: BNP is one of few European banks that have remained profitable over the past 15 years. Recent 3Q solid results show market share gains, lower costs and a more clear positive guidance.
• Royal Dutch: The company reported strong Q3 earnings and cash flow. The market expects the oil market to return to backwardation next year, situation which contribute as a tailwind.
• Siemens: The digital industries division continues to be a chance for this company (40% of profits). From a valuation perspective, the share offers an attractive expected dividend yield of 3.5% and also a higher FCF yield compared to peers.

Please find below our suggestions which you can adapt to your needs with our deritrade platform:

Sources

• Schweizer Aktien: Vontobel Equity Research.
• Royal Dutch: The company reported strong Q3 earnings and cash flow. The market expects the oil market to return to backwardation next year, situation which contribute as a tailwind.
• Europäische Aktien: Vontobel Morningstar (Research Notes können auf Anfrage bereitgestellt werden).