Weekly Research
Names in the News: The Kroger Co. (KR) & QUALCOMM Incorporated (QCOM) (report) We cover two high quality U.S. names this week, KR and QCOM. KR was upgraded to Overweight in the PRVit framework yesterday as the Valuation turned more favorable. The second company is QUALCOMM Incorporated (QCOM), which we highlight at a time when U.S. tech companies securing AI deals have caught investor attention following President Trump’s Gulf visit.
Expensive or Cheap – Shopping for Stock Picks in DM (report)
In this report we screen for stocks that are trading with high levels of expectations for growth going forward and for stocks with low expectations, relative to their own history for future value creation. We use our Future Growth Reliance (FGR) measure to identify the level of valuation versus history.
Consumer Staples: Strong Quality Names at Favorable Valuation Discounts (report) The Global Consumer Staples sector has seen a recovery in EVA growth from the lowest level in 20 years, in mid-2023, to almost turning positive at the beginning of this year. During the same period, market expectations have also continued to rise as investors price in a further improvement in EVA Momentum. Future Growth Reliance, which measures the percentage of market value dependent on incremental EVA generation, was trading near the upper end of the 10-year range in April.
Industry Snapshot: U.S. Banks (report)
EVA Momentum (growth) finally turned positive in March after 18 months of negative incremental value creation. The improvement to EVA Momentum was led by accelerating top-line growth and an improvement in EBITDAR Margin. The industry’s Quality has suffered despite strong Profitability due to high Risk levels. The industry has favorable Valuation levels. We see opportunities for stock-picking within the industry given the favorable Quality-Valuation tradeoff at a firm level.
Buyer Beware: Global ex U.S. Large Cap (report)
In contrast to our ‘Better World’ screens that identify high-Quality or cheap-Value names with strong ESG scores, this week we offer the latest edition of our ‘Buyer Beware’ series focused on Global ex U.S. Large Cap companies. To make the list, companies must have poor Quality, expensive Valuation, and low-ranked ESG Performance scores.
Quant Reports
Quant Corner: May 15, 2025 (report)
PRVit spreads were positive in Europe and Japan through the middle of May. Quality had been working everywhere in April but saw positive spreads in Europe and Japan only. Cheap Value outperformed expensive Value in all regions.
PRVit Factor Report: China (report)
Quality, Value, and PRVit have had strong performance from the end of February 2025 through the first week of April. All three factors slipped during the rest of April. Quality worked in April but has struggled over the last year. Profitability Trend (P2, our growth metric) has been historically strong (+71bps/month) and worked in April (+80bps). Investors took off Risk in April (low-Risk names outperformed high-Risk names).
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This material is from ISS EVA and is being posted with its permission. The views expressed in this material are solely those of the author and/or ISS EVA and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
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