ESMT - Underappreciated stocks: Raymond James picks for offense and defense

2023-04-03 07:55:11 ET

The Raymond James list of thematic stock picks trailed the broader market in March, but analyst Tavis McCourt is sticking with the current group going into the second quarter.

"Our Thematic Concentrated list underperformed by 7.7% in March and 10.0% in the quarter, as the bank crisis and subsequent performance skew towards large cap tech had a material negative impact on performance of the list," institutional equity analyst McCourt wrote in a note.

The Thematic Concentrated Stock Picks List is down 2.9% year to date. That compares to a gain of 7.1% for its benchmark Russell 3000 ( NYSEARCA: IWV ) and 7.5% for the S&P 500 ( NYSEARCA: SPY ).

Since its inception in mid-2020 it is up 64.7% vs. 30.1% for the Russell 3000, a relative outperformance of 34.6%.

The list is split into themes. The stocks by themes are:

Playing defense

• Encompass Health ( EHC ), rating Strong Buy, relative performance since added 8%

Defensive on a Fed mistake

• AIG ( AIG ), Strong Buy, 14.1%

Defensive on a lower inflation outlook

• Hartford Financial ( HIG ), Outperform, 8.1%

Defensive on a recession outlook

• Fidelity National ( FIS ), Strong Buy, -46.1%
• Atlantica Sustainable Infrastructure, Outperform, -4.6%
• T-Mobile US ( TMUS ), Strong Buy, 31.5%
• Allstate ( ALL ), Strong Buy, -7.1%
• Equinix ( EQIX ), Strong Buy, 4%
• EngageSmart ( ESMT ), Strong Buy, -7.1%
• Chubb ( CB ), Strong Buy, -12.3%
• American Homes 4 Rent ( AMH ), Outperform, -9.9%
• CACI International ( CACI ), Outperform, -0.8%

Playing offense

• Hancock Whitney ( HWC ), Strong Buy, -5.7%

Going on offense for higher rates and a sustained economy

• Valero Energy ( VLO ), Strong Buy, 29.1%

Going on offense with soft landing beneficiaries

• Dave & Buster's ( PLAY ), Strong Buy, -2%

Check out Goldman's screen for high-growth, high-margin stocks .

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