One of the issues President Trump discusses is NAFTA deals which he believes having a trade surplus with Canada is a bad idea, which begs the questions if a surplus is bad idea is a deficit a good one? Anyways, the President is willing to disrupt 70 year old supply chains with increased tariffs and a host of other things. NAFTA discussions are at the time of writing on going.
If you wish to invest in a blue chip stock which seemingly has very little connection to NAFTA which ones would you invest in? Hugh Smith of Thomson Reuters used their data to show how you can narrow any field you wish to.
His search criteria was:
in uncertainty try to ensure your defense is up – consumer staples, health care, telecom and utilities.
market cap of at least $30 billion to further limit downside risk
use of the Thomson Reuters StarMine Countries of Risk Model which breaks down where the revenue source of the company comes from. In this case, the criteria is 85% revenue exposure to the US and no more than 2% to Mexico or Canada
use of the Thomson Reuters Combined Alpha Model – which considers momentum, valuations, buy side sentiment, analyst sentiment, short interest insider transactions and earnings quality. The score is top 10% relative to their peers.
Company Mkt Cap Relative Revenue Exposure Combined Divid 1 Yr
$ Bil US Cana Mexico Alpha Model Yield Return
Keuring Dr. Pepper 32.080 89 0.29 0.203 96 7.5 58.5
AT&T 235.216 93 n/a 1.814 94 6.3 -4.2
HCA Healthcare 45.505 96 n/a n/a 96 0.5 69.4
Cigna 45.353 87 0.34 0.1 94 0.0 0.0
Express Scripts 50.675 100 92 0.0 41.0
Linking to dividend paying stocks, the chart shows many research companies have great data to mine. If you are looking or have a particular idea, you can find it and lower your risk to increase your reward.
There are more questions than answers, till the next time – to raising questions.