ISS EVA Research Roundup: June 26th, 2025

Weekly Research

Names in the News: MSI and NVDA (report)

We cover two large cap U.S. Tech names this week, MSI and NVDA. MSI is an ‘Expensive but Worth It’ stock that moved higher earlier this week as the company announced VISTA Hybrid, a new AI-integrated SaaS solution designed to modernize 911 call handling across the United States. NVDA has seen an 8+% jump in its stock price through the first 3 trading days of this week, becoming the world’s most valuable company again, reflecting the U.S. stock market’s return to the “AI trade” on renewed optimism on the outlook for sustained growth in AI adoption.

Consumer Discretionary: Mid-Year Review (report)

We look back at our Consumer Discretionary 2025 Outlook and examine the current underlying EVA trends to reconcile our earlier views on the sector. Distributors and Household Durables are some of the few industries in the sector with a positive EVA Shock, reflecting an improvement in EVA Momentum (growth) on a QoQ basis. The Textiles, Apparel, & Luxury Goods industry, on which we outlined a negative view at the start of the year, has been the worst-performing industry within the sector through 2025 so far.

Consumer Staples: Mid-Year Review (report)

In this report we look at the mid-year performance of the Consumer Staples sector. Tobacco, one of our preferred industries at the start of the year, has seen the strongest returns on a YTD basis. The Household Products industry continues to look relatively favorable within the PRVit model given their very strong Risk-Adjusted Profitability (Quality), though Valuations have moved back to recent highs for Household Products.

Buy the Upgrade: Russell 1000 (report)

In many of our reports, we screen company lists using PRVit and tend to focus on companies rated as ‘Buy’ (PRVit > 80) and ‘Overweight’ (PRVit > 60 and PRVit < 80). This week we look at the annualized average active return of companies that have seen their PRVit score go from under 40 (a ‘Sell’ or ‘Underweight’) to over 40 in the last quarter. Report contains a screen of companies currently fitting these criteria.

Russell 3000 Reconstitutions (report)

This report looks at the additions to the Russell 3000 and provides the Quality, Value, and PRVit scores for each name. We provide three lists of the additions: 1) companies with a Market Cap over $1B; 2) companies that look attractive in the PRVit model (PRVit ≥ 60) with a Market Cap under $1B, and 3) companies with a Market Cap under $1B that are available in our coverage universe and have a PRVit score < 60.

Quant Reports

Quant Corner: June 26, 2025 (report)

PRVit spreads were positive in Europe, the U.K., and Japan through the fourth week of June. Quality worked in Japan while struggling elsewhere. Cheap Value outperformed expensive Value in all regions except Japan. High-Risk companies outperformed low-Risk companies in all regions.

PRVit Factor Report and Best of Best Screen: India (June 2025) (report)

Cheap Value has driven the market over both time periods, generating an average +102bps/month over the past year. Quality did not work in May but averaged 11bps/month of alpha over the past year. Investors looked for high-growth names as measured by our Profitability Trend (P2) factor, which had a spread of +137bps in May. Over the past year, investors have favored low-Risk names over high-Risk names (our Risk factor averaged +29bps/month).

Chart of the Week

PRVit Improvers: Average Active Returns

In our Buy the Upgrade: Russell 1000 report this week we look at how firms that have seen an improvement in their PRVit score, from a ‘Sell’ or ‘Underweight’ rating, have performed over various time periods. The findings are positive but also the number of firms meeting the criteria is limited, averaging 65 companies in any given month. It does reiterate that strong PRVit scores tend to outperform, as we have shown in our monthly PRVit Factor Reports.

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Originally Posted on June 26, 2025