Inflationary protection, capital gains at given risk levels, maintaining high liquidity
Balanced risk/return portfolioLow risk
Revenue forecast:45-54,5% per annum
Inflationary protection, capital gains at given risk levels, maintaining high liquidity. The portfolio is balanced in the risk / return ratio, which ensures optimal growth rates and allows you to extract income even in conditions of extreme price fluctuations, optimally meets the requirements of investors who are interested in sources of capital safety and moderate income in order to increase its value, which is ensured by correct calculations of possible price, technical and fundamental risks.
The portfolio is designed for an investment period of 3 calendar months or more. At the beginning of each reporting period (3 months), based on current market conditions, the distribution of portfolio assets is calculated at a given risk, not more than 3.5% per asset. At the end of the reporting period, all open positions in portfolio assets are rebalanced by taking profit.
The minimum investment period is 3 months
- December January February;
- March April May;
- June July August;
- September October November.
Risk per asset - up to 3.5%
Starting capital: € 50,000
Expected return for the reporting period -45-54.5%
The number of open positions during the reporting period - 20-30
Portfolio return for 2019 (percentage)
|Reporting period||2019 - 1||2019 - 2||2019 - 3||2019 - 4|
|Shares of American companies||17.89||16.15||15.42||19.93|
|Shares of European companies||6.12||5.18||4.35||11.12|
|US stock indices||10.26||7.38||8.83||10.35|
|European stock indices||8.75||6.52||4.14||9.12|
Tech stocks were among the leaders in the 5-month US market recovery after the coronavirus-caused crash. A common structural problem for major tech stocks is antitrust attacks from regulators and concerns about protecting users' personal data.
At the moment, the securities of most companies are in the area of obvious support, which increases the likelihood of a rebound.
Consider the TOP 11 companies to buy.
Apple shares fell 20% from their all-time high in early September. The AAPL drawdown created interesting buying opportunities.
Factors in favor of buying
- A support zone passes in the region of $ 106-100, from where there will be a high probability of a new rebound. Quote for the first half of Wednesday trading, 09/23/2020 - $ 110.4.
- The forecast assumes a 17.1% increase in earnings per share (EPS) over the next 12 months. In the next five years, an average of 12.5% per year is expected.
- New iPhone models will be unveiled in October. This time, it is possible to use 5G technology.
- The strength of the brand, in part, justifies the high cost of apple products. There is a whole "club" of Apple fans who buy new iPhones from year to year. Apple's complex ecosystem facilitates the purchase of not only basic but also non-essential products of the company. Due to this, the service segment is actively developing. In September, the company unveiled the Apple One suite, which brings together music, TV, games, news, fitness, and the cloud. Users will be able to pay by subscription for everything at once, rather than for individual options.
- Apple is actively generating free cash flows (FCF, operating flows minus capex). In the second quarter, FCF amounted to $ 14.7 billion, "cash and short-term investments" - $ 93 billion, debt - $ 113.4 billion. This indicates the financial strength of the company, allows it to invest in new technologies, pay dividends and carry out share buybacks. Apple shares have a dividend yield of 0.8% per annum.
- The median target for analysts is 12 months. - $ 125. Quote for the first half of Wednesday trading, 09/23/2020 - $ 110.4.
purchase of AAPL in the region of $ 103 with a target of $ 115. The potential yield is about 10%.
- In case of consolidation of securities below $ 100, a descent to $ 95 is possible.
- High competition in the smartphone market, given the high cost of the iPhone. The problem is especially acute in China, where the majority of the population is still not able to pay.
- With each new iPhone, the opportunities for revolutionary changes to the device are diminishing, which lengthens the smartphone update cycle for users.
- Anti-monopoly attacks by regulators.
The company's chart shows significant growth over the past six months; in early September, there was an exit from the growing channel as a result of correction. However, we expect the quotes to return to it and continue the growing movement. Strong 3Q 2020 earnings forecasts remain valid
TikTok may be blocked from downloading in the United States as early as September 20, and this is a positive moment for Alphabet. The company's video services business (especially Youtube) is seriously affected by the competition with the Chinese service.
At the same time, the company recently released a positive report for the 2nd quarter, and many investment banks raised their targets for securities to an average of $ 1700- $ 1800. Against the background of the general rally, there is a high probability of further growth in the stock.
Buy from the level of $ 1415 with a target of $ 1499.4.
The loss limit is set at the price level of $ 1400
Facebook shares plummet 18% from their all-time high in August. The FB drawdown created interesting buying opportunities.
We recommend buying around $ 240 with a potential return of about 12%.
Factors in favor of buying
- The securities approached the support zone of $ 245-235. The probability of a rebound from this zone is quite high.
- The coronavirus pandemic has heightened audience interest in online communication and recreation. In the second quarter, the audience of all FB (MAU) platforms, including Instagram, Messenger and WhatsApp, reached 3.1 billion. The social network itself accounted for 2.7 billion. New habits and consumption patterns have formed, which not everyone will abandon.
- The forecast assumes a 19.3% increase in earnings per share (EPS) over the next 12 months. In the next five years, it is expected + 16.4% on average per year. The company's net debt is negative (debt minus cash, $ 57.8 billion), which makes the company financially stable and allows it to invest in new projects.
- The digital advertising market is growing rapidly. EMarketer's forecast assumes an increase in spending in this direction by at least 10% annually from 2021 to 2023. In fact, a monopoly has formed on the global online advertising market - Facebook and Google.
- Targeted advertising in social networks is a special marketing promotion tool that differs from contextual and display advertising, and allows you to work with “warm” demand.
- Facebook is developing new services. Instagram is actively used as a direct selling tool, a shopping platform. In early August, the company announced the creation of a direct competitor to TikTok, launching the Reels feature for Instagram. It allows you to create short videos with audio overlay and additional effects.
- The median target for analysts is 12 months. - $ 297.5 Quote for the first half of trading on Tuesday, 09/22/2020 - $ 250.
buying FB in the region of $ 240 with a goal of $ 269. The potential yield is about 12%.
- In case of consolidation of securities below $ 230, a descent to the region of $ 220-210 is possible.
- Antitrust attacks by regulators, concerns about the safety of users' personal data, initiatives in the field of introducing a "digital" tax on the income of the largest tech corporations. This has already increased Facebook's costs related to data security and content moderation.
- At the end of June, major advertisers suspended their Facebook ad campaigns for a month, some of them until the end of the year. In their opinion, the social network poorly moderates messages that promote violence and racism. Small and medium businesses are not inclined to PR of this kind, but there is another problem - the weakening of the global economy due to the coronavirus pandemic
The Walt Disney Company operates in various areas of the media industry - owns a range of electronic, paper, radio and television broadcast media, which are part of the Disney / ABC Television and ESPN divisions, as well as a line of Walt Disney theme parks and resorts - Disneylands are located in the USA , Shanghai, Paris, Tokyo and Hong Kong. Walt Disney's best-known business for nearly a century has been in the studio producing films, music and theater productions. The conglomerate includes studios such as Walt Disney Studios Motion Pictures, Walt Disney Animation Studios, Pixar, Marvel, Touchstone Pictures, LucasFilm and others. Last year, the company launched the Disney + media streaming platform. In the second quarter, as we expected, the negative impact of the pandemic on the financial results of Disney was very pronounced due to idle parks and a slowdown in the studio business. However, we note that the Disney + streaming platform is able to recover some of the revenue lost due to quarantine measures, and otherwise we also saw no reason to refuse the investment in this blue chip. The media giant's stock has surpassed our target level since our last recommendation update in mid-June, yielding 13.3% in less than 2 months. We see moderate potential for further strengthening in Walt Disney stock over the medium term.
Technical picture DIS, W1:
The Internet retailer's shares fell 17% from their all-time high. Quote at Friday close - $ 2955. There is a support zone in the region of $ 2900-2800. So the probability of a rebound to the $ 3100 region is growing. If consolidated below $ 2,800, the stock could fall to $ 2,600.
It is noteworthy that, despite the coronavirus pandemic, Pfizer raised its forecasts for the current year - for net earnings per share from $ 2.82-292 to $ 2.85-2.95, and for revenue - from $ 48.5-50. 5 billion to $ 48.6-50.6 billion. Pfizer shares are among our recommendations with a "Buy" rating as a conservative long-term investment. Over the past month, in particular, the paper brought a yield of 11.5%. Pfizer's Q2 earnings were in line with our optimistic expectations despite the scale of the impact of the pandemic on the US economy. The COVID-19 situation had a minimal negative impact on the pharmaceutical giant's business - the net negative effect of the pandemic on the company's revenue in the second quarter was only $ 500 million, or 4%, and was mainly due to the refusal of Americans from routine medical examinations by pediatricians and therapists and a decrease in demand for certain types products in China. We highly appreciate Pfizer's resilience to the crisis in an unprecedented environment and believe that the stability of the company's financial results will be appreciated by investors as well, therefore we have no reason to cancel our “Buy” recommendation for Pfizer shares and set the target price for revision.
Technical picture of PFE, W1:
Johnson & Johnson
Johnson & Johnson is an American holding company founded in 1886 and leads a group of 265 subsidiaries around the world manufacturing pharmaceuticals, cosmetics, sanitary and hygiene products, and medical equipment. Over the past several decades, the company has been actively expanding, adding more and more product lines to the list of manufactured products. This was done through acquisitions of various firms, and today J&J's market capitalization is about $ 390 billion. Over the past 12 months, the company's securities have brought investors a 13.3% return, and we believe that their attractiveness in the long term will remain. First, the company remains undervalued in relation to the sector as a whole. Second, after reporting higher sales and profits in the second quarter, J&J improved its forecasts for the entire current year. Thirdly, against the backdrop of the coronavirus pandemic, the company began assessing the existing portfolio of antiviral drugs, and also began developing a vaccine against COVID-19, which they began to test in humans last week. In early 2021, the company expects to obtain approval for the use of its vaccine and expects that by April next year it will be able to produce 600-900 million doses. We maintain our Buy recommendation for Johnson & Johnson shares and maintain our target level for the instrument at $ 170.00, which is equivalent to 14.8% upside potential for securities from current levels.
Technical picture of JNJ, W1:
American Express is an American diversified financial sector company, the fourth largest payment system in the world. He specializes in financial services in the field of travel and tourism, issues credit and payment cards, travelers checks. American Express approached the crisis with a strong position in terms of capital adequacy and liquidity. The company has transferred its employees to remote work, has adopted a number of programs to financially support clients in the consumer sector and in the small business segment. We expect that the company will overcome the current crisis with reasonable losses, retaining its staff and customer base, and will be able to show a quick recovery from the victory over the coronavirus. American Express shares look inexpensive in terms of financial multiples, they look good in terms of technical analysis. We view American Express shares as an attractive investment after a strong decline earlier this year and recommend them to buy with a medium-term target of $ 110.
Technical picture of AXP, W1:
Since the stock split 1: 5, stock prices have been subject to significant volatility. At first, everything looked like a normal correction after explosive growth. Then the shares were not included in the S&P 500 index - the drawdown reached more than 20%.
Investors' expectations were reduced to the speedy introduction of new batteries, but even here, in their opinion, there was a puncture. However, this is only a short-term picture.
Musk reminded investors at the presentation that Tesla has been profitable for four consecutive quarters since Q3 2019. By the end of 2020, it is expected that the supply of electric vehicles will increase by 30-40% compared to 2019, that is, up to 514 thousand vehicles will be produced and sold.
Looking to the future, the company has unveiled the latest technology that will improve the performance of its electric vehicles and contribute to lower costs. Gene Munster predicts that this will increase demand. Yes, it will take more time, but positive dynamics in Tesla stock can be expected.
Cisco Systems Inc
Purchase from the level of $ 40.3 (on the SPB exchange) with the aim of $ 45 for a period of 6 months. Potential deal yield = 11.7% excluding dividends. Dividends over the set period could generate another $ 1.08-1.1, or about 2.7%.
- Dividends. The current annual dividend yield is 3.6%. The company is not a dividend aristocrat, as it has been paying dividends for less than 25 years, but throughout the history of payments since 2011, it has certainly increased them year after year.
- The paper has undergone a significant correction. Cisco stock quotes corrected sharply, first in August after the publication of the quarterly report, and later on the background of general market sales in the high-tech sector.
- In August, investors were disappointed by the company's forecast for a drop in revenue in the third quarter, which Cisco gave despite the fact that many of the largest corporations abandoned their forecasts, citing uncertainty about the impact of the pandemic.
- The buyback may resume. The company suspended buyback in the second quarter, which was difficult for the entire American economy, and this moment was taken into account in prices. If the uncertainty about the development of the situation with COVID-19 is removed as the vaccine is launched and social activity is fully restored, the share buyback may be resumed in the first half of next year.
- Strong financial position of the company. In fiscal 2020 (ended July), Cisco generated $ 14.7 billion in free cash flow, which is largely unchanged from fiscal 2019. Cisco ended the year with $ 29.4 billion in cash and cash equivalents and short-term investments. The weak forecast for revenue in August was accompanied by management's comments on upcoming operating cost cuts.
- 5G networks. An equipment maker could gain momentum as it gets closer to building 5G wireless networks.
Consensus forecast. Analysts are generally moderately positive about Cisco shares, with consensus at $ 49.2, according to Reuters.
- Second wave of coronavirus and delay in mass vaccination. In the face of the coronavirus situation, companies have cut spending on information technology.
- Cisco is committed to moving from on-premises data centers to hybrid cloud computing infrastructure. Lagging behind competitors in this process is a risk, but the company has the opportunity for transformation, the means for M&A deals.
As you know from statistics, stock markets grow 80% of the time, therefore, to diversify risks, the main stock indices of the USA and European countries are included in the investment portfolio.
US Broad Market Index S&P 500
The S&P 500 is a stock index basket of which includes the top 500 selected US stock companies. The list is owned and compiled by Standard & Poor's. The index has been published since March 4, 1957. 1941-1943 is taken as the base period for the calculation, the base value is 10. The shares of all companies from the S&P 500 list are traded on the largest American stock exchanges, such as the New York Stock Exchange and NASDAQ. The S&P 500 index value reflects their total capitalization. Fundamentally, the picture remains unchanged: cheap money continues to awaken greed, pushing the indices higher and higher, while inflation is still "sleeping" and so far you can not worry about the regulator's curtailment of stimulus measures.
Technical picture of S & P500, W1:
German stock index DAX30
DAX30 - DAX (derivative from German Deutscher Aktienindex) is the most important stock index in Germany. The index is calculated as the average capitalization-weighted value of the stock prices of the largest joint-stock companies in Germany (while the capitalization is calculated only on the basis of free-float shares). The index also takes into account dividend income received on shares, assuming that the dividend is reinvested in the share for which the dividend was received. Thus, the index reflects the total return on capital.
Technical picture of DAX30, W1:
Russian stock index RTS
The RTS Index (RTSI, RTS Index) is a stock index, the main indicator of the Russian stock market, the calculation of which began on September 1, 1995 from 100 points. Currently calculated by the Moscow Exchange.
Technical picture of RTSI, W1:
Precious metals are traditionally sought-after assets in times of heightened economic and political uncertainty. This year, the coronavirus pandemic and its dire economic consequences are forcing players to think about alternatives to investing in stocks. The Fed and other central banks are pursuing ultra-soft monetary policies, with the US government debt at an all-time high of over $ 26 trillion. During the years of Obama's presidency, the country's debt almost doubled, but under Trump, the US government's debt continued to grow, and given the need for large-scale stimulus measures due to the coronavirus epidemic, the situation with the national debt will only worsen in the foreseeable future. In light of this investment in precious metals is more interesting than ever.
Gold (XAU / USD)
The stock market rally from its March lows has become one of the most powerful in history, but in fact the shares are trading at about the level of the beginning of the year. At the same time, gold rose by as much as 30%, and is not going to stop there. The yellow metal usually strengthens amid low interest rates, exacerbating inflationary risks. Gold is also the oldest known defense against heightened uncertainty, which explains the demand for it in the midst of the worst pandemic ever faced.
Technical picture Gold, W1:
Silver (XAG / USD)
Should institutional investors begin to abandon Gold in search of alternative opportunities that can provide a higher return on investment, the ratio of silver to gold prices will continue to shift in favor of the "white" metal. In addition to fundamental factors, the growth of industrial demand for this metal used in the automotive industry will play in favor of the rise in silver prices in the long term - electric and hybrid motors are produced using silver, and silver is an integral element in solar energy - it is used in photovoltaic cells ... We have every reason to maintain our “Buy” recommendation for Silver, and set the target level to be revised upward.
Technical picture Silver, W1:
All entry points, position sizes, rebalancing conditions and analytical support are provided to the client after the conclusion of an agreement on the services of a portfolio manager and the presence of a corresponding balance on the client's account.