Trading Central has analysed the top US-listed stocks in the technology, communications, and consumer discretionary sectors generating five-year EPS growth of at least 10% and stocks with debt to equity ratios of one or lower. It screened just 10 stocks as a result. Analog Devices, a semiconductors firm, made it to the top with a 7.32 rating on Trading Central's stock rating methodology. PulteGroup, a US homebuilder, had the highest five-year average EPS growth rate at 50.2% and impressive YTD and one-year performances of 52.6% and 66.9%, respectively.
Alcoholic beverages company Diageo has been praised by Questor for increasing sales and operating profit margins despite rising costs due to inflation. The company has been raising prices and investing in cost efficiency measures. Additionally, the firm has made several acquisitions over recent years to facilitate its strategy to focus more on expensive beverages that are presently gaining in popularity among customers. The company also enjoys exposure to emerging economies in Asia. The upcoming retirement of Diageo's CEO, who has held his role for 10 years, is unlikely to have an impact on the firm's share price performance.
Investors in the US are expecting a deal to be reached to lift the country's debt ceiling, leading to a sell-off of tech and growth stocks and a shift towards other market sectors. Heavyweights such as Alphabet and Amazon have been attractive to investors due to their strong balance sheets and predictable cash flows, but the fear of a budget crisis has meant the broader market has lagged behind. Negotiations in Washington had led to concerns about government defaults, but investors expect an agreement through until September to be forthcoming.
Hong Kong Stock Exchange (HKEX) will launch a dual counter trading model on 19 June allowing investors to interchange securities listed in both Hong Kong dollars and renminbi counters. The latest measures are hoped to "enrich Hong Kong's RMB products ecosystem", said HKEX CEO Nicolas Aguzin. He added, "it will give issuers and investors more choice and it will support the ongoing internationalisation of RMB". Major companies including Ping An Insurance Group, AIA Group and Tencent have already submitted applications for a dual currency counter.
Morgan Stanley CEO James Gorman has announced he plans to step down within the next year, after 13 years at the bank's helm. However, there will be no major strategic change, according to analysts. Gorman has broadened the business so that it is less dependent on trading and investment banking, and focused more on wealth management. The department that generates less volatile revenue made up 45% of the firm's Q1 earnings.
Morgan Stanley CEO James Gorman has revealed plans to step down within a year to be succeeded by one of three internal candidates. While no exact timing has been agreed, Gorman suggested he planned to become executive chair after his successor has assumed the CEO role. Morgan Stanley's market value has tripled to around $140bn during Gorman's more than
a decade-long tenure, driven in part through a doubling down on wealth and asset management.
Anthony Constantinou, who ran the foreign exchange trading firm, Capital World Markets (CWM), has been found guilty of masterminding a £70m Ponzi-style scheme. CWM received around £70m between 2013 and March 2015, after which the City of London Police raided its offices. Hundreds of victims lost around £50m. According to prosecutors, CWM’s managed account was in reality a Ponzi-style scheme with little foreign exchange trading and the company spent the money it received on other things such as sponsorship deals. An international warrant has been issued to arrest Constantinou. He will be sentenced on 9 June.
US lawmakers are using investment funds to trade with little scrutiny, causing concerns over conflicts of interest according to reports. Whereas individual stock transactions must be reported within 45 days, senators purchases portfolio positions just once a year. At the end of 2021, almost 90% of senators sold investment funds worth $260m, dwarfing the scale of individual stock trading. Investors with around 50% of senators owning individual stocks with a cumulative value of over $60m, excepted investment funds are typically highly concentrated, prompting an analysis into how they are used. Democracy Forward, a non-profit progressive group is calling for the US securities regulator to expand the scope of stock-trading disclosures.
Concerns around conflicts of interest come particularly as high-ranking officials have been shown to have profited from using confidential briefings to trade stocks during the early stages of Covid-19. While some experts argue that rules have failed to keep up with the investment industry over recent decades, the suggested exemptions from reporting rules are based on the belief that funds are diversified and difficult to exploit. However, according to former chief ethics lawyer for the Bush administration, Richard Painter, industry and country-specific funds create the same issues with respect to conflicts of interest and criminal insider trading that individual stocks do.
Problems with Congress not keeping up-to-date with industry changes are highlighted, and the White House remains subject to tighter restrictions on funds that concentrate on country-specific or particular sectors. There are growing concerns, however, over members of Congress investing their funds heavily in countries that are trading with the US with a principal task to grow the US economy. The calls for greater transparency are likely to continue as the push towards ESG continues to enhance the scrutiny of investment practices across the board.
