eyeQ: 10 actionable trading signals for week beginning 11 November 2024

"Our signals are crafted through macro-valuation, trend analysis, and meticulous back-testing. This combination ensures a comprehensive evaluation of an asset's value, market conditions, and historical performance." eyeQ

• Discover: eyeQ analysis explained | eyeQ: our smart machine in action | Glossary

This series of weekly articles uses eyeQ’s smart machine to highlight 10 stocks whose share price trades at either a discount or premium to eyeQ’s Model Value price (where macro conditions say the share 'should' trade).

A minus figure in these tables indicates a share trading below eyeQ’s Model Value, implying they are ‘cheap’ versus macro conditions. A plus figure screens as rich because the current share price is above eyeQ’s Model Value.

All companies must have a model relevance above 65%, which means the macro environment is critical and any valuation signals carry strong weight.

Here are definitions of terms used in the analysis:

Model value

Where our smart machine calculates that any stock market index, single stock or exchange-traded fund (ETF) should be priced (the fair value) given the overall macroeconomic environment. 

Model relevance

How confident we are in the model value. The higher the number the better! Above 65% means the macro environment is critical, so any valuation signals carry strong weight. Below 65%, we deem that something other than macro is driving the price. 

Fair Value Gap (FVG)

The difference between our model value (fair value) and where the price currently is. A positive Fair Value Gap means the security is above the model value, which we refer to as “rich”. A negative FVG means that it's cheap. The bigger the FVG, the bigger the dislocation and therefore a better entry level for trades.  

Long Term model

This model looks at share prices over the last 12 months, captures the company’s relationship with growth, inflation, currency shifts, central bank policy etc and calculates our key results - model value, model relevance, Fair Value Gap.

Source: eyeQ. Long Term tactical models. Data correct as at 8 November 2024

AVIVA 

It’s been a good year for the Aviva (LSE:AV.) share price. The stock hit a floor in 2020, but in the last few years it has made a strong recovery. The insurance giant’s shares are up 20.16% over the last 12 months.

As inflation falls and the Bank of England continues to cut rates, Aviva will look more attractive to income seekers once savings rates and bond yields start to fall.

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eyeQ’s smart machine shows the model is back in regime. Investors need to understand the big picture stuff moving the stock: lower volatility, higher growth and more risk averse investors. The stock currently sits 4.52% under eyeQ model value and the machine fired a bullish signal.

For bulls, this could be a steal and eyeQ is telling you that it is the right time to add this stock, but don’t forget to do your own research and keep on its trading update scheduled for Thursday before making a final decision.

Source: eyeQ. Long Term tactical models. Data correct as at 8 November 2024

Costco

Costco Wholesale Corp (NASDAQ:COST)’s stock price surge to a record high $948 – up by 45% year to date – driven by robust financial performance, resilient business model and a cult-like following that constantly drive growth initiatives.

E-commerce played a significant role in driving sales this quarter. In addition, the firm’s disciplined and well-thought approached to expansion – selective locations – and including service offering has helped Costco to strengthen its market footprint.

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eyeQ’s smart machine shows the stock wants lower inflation, higher growth and lower volatility. Macro is in play for this stock – 73% macro relevance – investors need to keep an eye on the bigger picture stuff. Trump is back in power and the stock market loved the results.

If you believe Trump will deliver on his promises, then Costco could be a great addition to your portfolio. Model value increased by 4.53% in the last month but that wasn’t enough for the smart machine to trigger a signal. The stock currently sits 2.04% rich to overall market conditions. For bulls, sit this one out and wait for a better price entry point.