Granola may seem like a healthy breakfast food, but its health benefits are disputed. The main ingredients are oats, nuts, seeds and dried fruit, but some varieties contain a lot of sugar.
While granola may not be the best way to start the day, Goldman Sachs, the US investment bank, says another type of ‘granola’ could provide the nutrition your wallet needs.
With just 14 days to invest this year’s Isa allowance, the advice to take a look at these 11 European companies is worth considering. The Granolas are GlaxoSmithKline, Roche, ASML, Nestlé, Novartis, Novo Nordisk, L’Oréal, LVMH, AstraZeneca, SAP and Sanofi.
As has been pointed out, this actually expresses Grannn(o)llass.
But Goldman analysts aren’t fazed, saying these names are all “quality growth factors with international exposure.”
Tasty: While granola may not be the best way to start your day, Goldman Sachs says another type of “granola” could provide the nutrition your wallet needs.
Indeed, they are the equivalent of the conquering technological stocks of the American market, the Magnificent Seven: Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla.
Unlike the Magnificent Seven, the Granolas provide exposure not only to technology, but also to a wide range of other sectors such as beauty, food, luxury, pharmaceuticals and software.
Dutch group ASML manufactures AI microchip machines. Norwegian company Novo Nordisk makes the weight-loss drugs Wegovy and Ozempic, taken by Elon Musk, Oprah Winfrey and at least 9 million others. French giant L’Oréal has brands such as Lancôme and Essie, with nail polishes available in shades such as Mrs Always Right (dark pink).
Goldman’s focus on undervalued opportunities in continental Europe and the United Kingdom has sparked a fad for these stocks, pushing the Stoxx 600 index to record highs this year.
Not to be outdone, Wall Street’s other name, Citi, has named its “Super Seven”: Novo Nordisk, ASML, LVMH, SAP, Schneider Electric, Richemont and Ferrari. Meanwhile, SocGen, a French institution, has listed its “Seven Wonders of Europe”: Novo Nordisk, ASML, LVMH, SAP, Siemens, Schneider Electric and Hermes.
Like LVMH, this iconic handbag house is seen as less vulnerable to the headwinds facing the luxury sector.
THIS categorization is perhaps fanciful. But I would argue that it has raised the profile of best-in-class companies, unfairly overshadowed by the Magnificent Seven.
This week, Nvidia may have asserted its dominance with the launch of “the world’s most powerful AI chip.” However, in a much more discreet manner, AstraZeneca continued to develop its expertise in radiology through the $2.4 billion acquisition of Canadian oncology biotechnology company Fusion Pharmaceutical.
Goldman Sachs says Granolas represents good value since the stock trades at around 20 times next year’s expected earnings, while Magnificent Seven stock trades at around 30 times.
The investment bank’s Sharon Bell adds: “As Europe’s economy struggles, Europe’s biggest companies are looking for growth around the world.
She also argues that these actions should also be boosted by the “structural shift towards passive investments”. More and more money is flowing into “passive” or index funds, a trend that tends to benefit larger companies. Some passive strategies also favor actions that thrive, because success breeds success.
Among those already convinced of Goldman’s thesis is Sam Morse, manager of the Fidelity European Fund and the Fidelity European Trust, which own ASML, L’Oréal, LVMH, Nestlé, Novo Nordisk, the German software giant SAP and Sanofi, the French pharmaceutical group. ,
Morse says: “These companies only get about 20 percent of their revenue from Europe. About 40 percent comes from the United States and 40 percent from the rest of the world.
“But they have many of the characteristics we look for in stocks, such as cash generation, earnings stability and strong balance sheets.” They also enjoy consistent dividend growth and pricing power from their strong competitive positions.
“We ensure that the risk-reward associated with each holding remains appropriate as share prices have increased.” He added: “That said, most valuation metrics are not overextended at present and we still see upside potential – hence our positioning in these names. »
With 15 days until the start of the new tax year, I’m planning next year’s Isa. I already have holdings in some European index funds and the Janus Henderson European Mid and Large cap fund, but I intend to increase my holdings.
Paul Angell, head of investment research at broker AJ Bell, cites BlackRock Continental European Income, which owns Novo Nordisk and other Granolas. Interactive Investor’s adventurous European pick is Fidelity European.
Attention will turn even more to Granolas in the months to come. Investors will want to continue the thrill ride of the Magnificent Seven. FOMO (fear of missing out) is a hallmark of this Isa season. But they will also want the security of diversification in Europe – on the basis that a portfolio, like a healthy breakfast, must be well balanced.
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