STOXX 600 Q2 2020 Earnings Preview

Pharmaceuticals & Medical Research also has a strong ARM score of 74, given the critical role this sector is playing in providing a long-term solution to COVID-19. The STOXX 600 Q2 Health Care earnings growth rate is expected to be 2.0%, which is the only sector in positive territory.

Other industries including Food & Drug Retailing, Telecommunications also have benefited from COVID-19 as consumers stockpiled groceries and relied on the internet while working from home.

We observe a strong correlation amongst both ARM (sell-side) and SmartHoldings (buy-side). The SmartHoldings Model (SH) predicts forward changes in institutional buying and selling by determining which factors are currently favored by institutional investors and which stocks are becoming more or less desirable in the current environment. Twenty-five fixed factors across volume, price momentum, profitability, value, growth, analyst revisions, and leverage are utilized and ranked from most popular to least.

A company with a high SH score indicates that it is well-aligned with current market preferences and likely to pass investor ‘idea generation screens’.

Exhibit 4 highlights the top single-name companies within the STOXX 600 who currently have the highest ARM score.

Exhibit 4: STOXX 600 Constituents ranked by ARM Score


Source: Refinitiv Eikon

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