UBS’ top Quantamentally ranked US stocks in each sector

UBS analysts listed the three highest stocks ranked by their quantamental analysis in each of the 11 sectors.

These stocks screen well when looking at CTA momentum, economic regime probability, crowding, EPS growth, rates momentum, risk targeting signals, stock volatility, options volume, adjusted forward PE ratio, sector PMI, and earnings revisions.

Nicolas Le Roux, senior strategist at UBS, said that the highest-scoring stocks “tend to come from sectors such as financials (XLF), especially banks (KBE), media (SOCL), (GGME), capital goods and communication services (XLC).” The lowest-scoring stocks are dominated by household personal products (SP500-3030), semiconductors (SOXX), (SMH), food beverage (PBJ) and tobacco and materials (XLB).

“Our price momentum algorithm is initiating a sector rotation, reducing exposure from cyclicals (Tech, Industrials & Financials) and rotating towards more defensive industries (Staples, Utilities & Comm. Services),” Le Roux said.

In addition, he mentioned that positioning in “over-owned” utility stocks (XLU) has slightly improved, and that earnings expectations and momentum are ticking lower for consumer-oriented industries.

Here are the highest scoring stocks per each sector in the U.S., as of Wednesday. These also have a “buy” or “neutral” UBS rating.

Communication services: T-Mobile (TMUS), Walt Disney (DIS), and Meta (META).

Consumer discretionary: Ralph Lauren (RL), Hilton Worldwide (HLT), and Royal Caribbean (RCL).

Consumer staples: Kroger (KR), Costco (COST), and Tyson Foods (TSN).

Energy: Kinder Morgan (KMI), Targa Resources (TRGP), and EOG Resources (EOG).

Financials: Principal Financial Group (PFG), Willis Towers Watson (WTW), and AON Plc (AON).

Health care: Insulet Corp. (PODD), Cardinal Health (CAH), and Cencora (COR).

Industrials: Parker Hannifin (PH), Cummins (CMI), and Broadridge Financial (BR).

Information technology: Corning (GLW), Analog Devices (ADI), and Broadcom (AVGO).

Materials: Corteva (CTVA), Eastman Chemical (EMN), and DuPont De Nemours (DD).

Real estate: Simon Property Group (SPG), Camden Property Trust (CPT), and Invitation Homes (INVH).

Utilities: Ameren (AEE), NextEra Energy (NEE), and Entergy (ETR).