Handelsblatt Portfolio

Stocks To Weather a Storm

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Where is the money? Handelsblatt offers advice.
  • Why it matters

    Why it matters

    If the Handelsblatt 2015 picks are as good as they were in 2014, the latest batch will outperform the market by 18 percent.

  • Facts

    Facts

    • Since 2012, Handelsblatt’s stock picks have performed better than benchmark indexes.
    • In 2014, eight stocks – ACE, Accenture, Roche, Sodexo, Walt Disney, CVS Health, Abbott Labs and Union Pacific – did twice as well as the relevant indexes.
    • The health and real estate sectors are heavily represented on this year’s list, which includes Roche, McKesson, Medtronic, CVS Health, Simon Property, Land Securities, American Tower and ACE.
  • Audio

    Audio

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German investors don’t know where to turn. Experts are warning of a gigantic bubble in the bond market, and stocks don’t look much better.

The German blue-chip DAX Index has shed a fourth of its value after climbing to an all-time high of 12,391 points in April. October saw a modest recovery of just 3 percent.

In this difficult financial environment, investment professionals recommend concentrating on selected stocks, that are either seriously undervalued or have great potential due to a company’s innovations.

With this strategy, even the cautious can dare to invest their money in stocks, regardless of whether it’s a bull or a bear market.

“Since the future is what's traded on the market, innovation is a particularly important criteria when looking at pharmaceutical companies. ”

Bernhard Weiniger, analyst at Independent Research

In an effort to save investors some time and trouble, the Handelsblatt Research Institute regularly compiles a list of eight stocks in America and Europe that stand out for their lack of volatility, receive the best marks from analysts over the past three months and have a market capitalization of at least €10 billion, or $11.4 billion.

Handelsblatt began picking stocks in 2012, and its selection has outperformed the relevant benchmark indexes every year. A portfolio of Handelsblatt’s stock picks in 2014 did twice as well as the indexes since September last year. The European stocks saw their value increase by 15.5 percent, while the U.S. stocks climbed significantly higher than the Dow Jones average.

Accenture, a business consulting company headquartered in Ireland, saw the strongest growth in stock value among Handelsblatt’s picks, rising 44.3 percent since Sept. 8 last year. The Swiss pharmaceutical company Roche was also among the top performing stocks, delivering a return in euros of 41.8 percent.

 

A Good Pick stock picks DAX German US benchmark-01

 

Handelsblatt’s new selection includes several pharmaceutical stocks: American pharmacy chain CVS Health, Irish medical technology company Medtronic, Swiss drugs maker Roche and the U.S. pharmaceuticals dealer McKesson. McKesson purchased its Stuttgart-based rival Celesio last year and experienced significant growth, piquing the interest of investors.

“Since the future is what’s traded on the market, innovation is a particularly important criteria when looking at pharmaceutical companies,” Bernhard Weiniger, an analyst at Independent Research, told Handelsblatt. “Roche has products in the pipeline that are promising.”

Why are so many companies from the health and pharmaceutical industry among the top picks?

“It has to do with the fact that their business model is relatively independent from economic ups and downs,” Mr. Weiniger said.

The real estate sector, which has profited from near zero interest rates, is also well represented in Handelsblatt’s new selection. Simon Properties is the world’s largest real estate investment trust. Land Securities, a British firm that specializes in high-value London properties, has seen its stock value nearly double since January, 2014.

There was also American Tower, a hidden champion from the United States that’s barely known in Germany. The company installs thousands of telephone poles and antennae for telecommunications companies worldwide.

The last company on the list is Zurich-headquartered insurance firm ACE, which is listed on the New York Stock Exchange and included in the S&P 500 index. The stock was on Handelsblatt’s stock picking list two times before and now has again been included in the top eight.

 

Georgios Kokologiannis is an editor with Handelsblatt’s finance desk in Frankfurt. To contact the author: kokologiannis@handelsblatt.com

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