7 months ago
BofA’s ’Triple Momentum Allocator’ is flashing buy signals on these stocks
Investing.com -- Bank of America said its proprietary “Triple Momentum Allocator” strategy is continuing to deliver strong results, flagging several top-ranked stocks globally as buy signals remain persistent.
“Signals from Triple Momentum tend to last longer than most investors would expect,” BofA analysts wrote in a recent note.
The bank explained that since 2004, stocks in the top quintile of the Triple Momentum framework have outperformed for an average of eight months, with “minimal” performance decay out to 18 months.
In contrast, stocks in the bottom quintile have underperformed over an average 18-month period.
In July alone, top-quintile stocks outperformed bottom-quintile names by 0.4%, bringing the year-to-date spread to 6.4%, according to BofA.
Among large-cap, highly liquid names (market cap above $20 billion and average daily turnover over $20 million), BofA’s top-ranked Triple Momentum stocks in the U.S. include Expand Energy, Amphenol (NYSE:APH), and GE Vernova.
In Europe, the top names are Erste, Lloyds (LON:LLOY), and Prudential (LON:PRU), while in Japan, NEC, Toyota (NYSE:TM) Tsusho, and Mitsubishi Electric (OTC:MIELY) made the list.
In Asia Pacific excluding Japan, Hyundai Heavy Industries (KS:009540), Hanwha Ocean, and China Hongqiao were flagged.
Momentum was said to be strongest in financials. “Triple Momentum is now strongest for Diversified Financials, Insurance, and Banks,” BofA said. Conversely, it is weakest for global Energy, Real Estate, and Consumer Staples.
In Asia specifically, the strongest momentum signals were seen in “Hong Kong Diversified Financials, China Insurance, and China Materials,” with the top-ranked Asian country-sectors outperforming the bottom-ranked ones by 16.2% year-to-date, the bank added.
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