Overlooked opportunities in YWR’s QARV rankings
Why do China, shipping, iron ore, hardware, Brazil… all stand out if you screen high ROE’s with low valuation? Erik@YWR sees it as scepticism about global growth on which he is taking a contrarian view. Following this month’s review of YWR’s QARV rankings key themes include: 1) A massive China bull market has only just begun. 2) Opportunities in iron ore, where Fortescue, Rio Tinto and Kumba are delivering ~20% ROEs at <12x P/E despite China’s property crash. 3) The Taiwanese semiconductor supply chain stands out as highly profitable and undervalued. Everyone focuses on Nvidia and the datacentre buildout but misses the whole Taiwanese supply chain behind this. Tokyo Electron and ASML also screen well. 4) Brazil is overlooked, with names like Itau, Vale, Ambev and B3 all screening well. 5) Container shipping - supply-chain diversification could sustain tighter freight rates than investors expect.
Edition: 220
- 19 September, 2025
EM Exchanges: Brazilian exchange B3 stands out
Financials
Galliano's Financials Research
Victor Galliano sticks with B3 as his core value pick; it has a growing share of data revenues, its post-trade revenues are understated and equity fee pressure is easing. He keeps Hong Kong Exchange as a buy, with its high share of post-trade revenues; its shares have been highly volatile, but represent relative value combined with growth potential. Philippine Stock Exchange and BSE are new additions to Victor’s coverage of EM exchanges with PSE being one to watch; MexBolsa is deep value but lacking a re-rating catalyst.
Edition: 203
- 24 January, 2025
FinTech & Financials: 2022 investment themes
Financials
Galliano's Financials Research
1. A shift into value in EM banks; cautious on digital banks - top picks are Sberbank, Banco do Brasil and HDFC Bank. Nubank likely to be one of the EM FinTech big negative surprises of 2022.
2. Southern Europe banks, position for the prospect of higher interest rates - highlights BBVA and Banco BPM.
3. Exchanges, competitive pressures are real, but are they priced in - B3 and Singapore Exchange standout.
4. Growth and value in digital payments - highlights Mastercard and, for its deep value, PagSeguro.
5. Digital wealth managers, picking a potential winner - BTG Pactual.
Edition: 126
- 07 January, 2022
Exchanges - More than just trading places
Financials
Galliano's Financials Research
Galliano believes SGX is one exchange to watch. Management has more to do to diversify the revenue base, yet its valuations are relatively undemanding and the market’s competition concerns, as in the case of B3, may be overdone.
Edition: 121
- 15 October, 2021