eyeQ: 10 actionable trading signals for week beginning 3 February 2025

"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.

UK Top 10

Source: eyeQ. Long Term strategic models. Data correct as at 2 February 2025.

GSK

2024 was a very frustrating year for the FTSE-100 drug maker. Shares hit an all-time low at the end of the year but have since picked up, although only slightly.

The overhanging Zantac litigation case and the attacks on Big Pharma by President Trump and Robert Kennedy Jr. haven’t helped either.

But macro is important too - model confidence is very high on eyeQ. The overall macro picture is mixed - model value bottomed in mid-January, has bounced slightly since but has yet to show signs of any definitive improvement in macro conditions. 

GSK (LSE:GSK) screens as lightly (3.74%) rich to model but that valuation gap is too modest to prompt any signal. 

International Top 10

Source: eyeQ. Long Term strategic models. Data correct as at 2 February 2025.

Colgate-Palmolive

Last week, disappointing earnings plus a muted outlook for 2025 conspired to drive Colgate-Palmolive Co (NYSE:CL)'s stock price back towards recent lows. 

That sell-off leaves the stock 10.44% below eyeQ's model value, which has been moving sideways for a couple of months now. Ideally, to get really positive we'd see that trend higher but, even at these levels, we have a bullish signal. A fair amount of bad news is already in the price at these levels.

CL is what's known as a consumer staple - the kind of stock that is called defensive, offering a place to hide in times of trouble. So, we have a decent entry level for a safe-haven play for anyone worried about the weekend's tariff announcements from President Trump.