Investing

Five Quantitative Analyst Stocks With Limited Emerging Markets Exposure

With U.S. interest rates set to rise, concerns of a slowdown in the Chinese economy and the devaluation of several emerging market (EM) currencies, those markets are facing a rocky and uncertain road ahead. In Deutsche Bank’s monthly quant view research piece, the firm looks for strategies that investors can implement to limit their exposure to emerging markets during this period of high uncertainty.

While much of the damage and data was factored in during the recent 6% decline, nervous investors may find the Deutsche Bank stocks to buy easier to sleep with at night. The Deutsche Bank team tests whether a company’s reported EM revenue as a percentage of total revenue provides a reasonable proxy to EM market exposure. This helps to flush out stocks with too high of a revenue exposure to volatile markets.

AbbVie Inc. (NYSE: ABBV) is a top pharmaceutical name to buy. The company has thrown its hat in the ring in the race of oral interferon-free combination therapies for hepatitis C. It has finished up its Phase III clinical-trial program for its all-oral hepatitis C drug cocktail. There were six clinical trials in total, testing the drugs in different patient populations, in many cases with and without generic ribavirin. AbbVie’s drugs only have to be taken for 12 weeks in most cases and do not require peginterferon. Investors are paid a very solid 3.3% dividend. The Thomson/First Call estimate is a $54.38. AbbVie shares were trading at $48.35 late on Friday.

Boeing Co. (NYSE: BA) rattled Wall Street with forward expectations and cash flow causing a large drop in the index the day the news hit. Wall Street analysts see trends for solid profitability and growth into 2016. Most also think it is important to note that 787-9 unit costs have declined 25% from unit one to four, costs are coming down on the 747 and the recent machinists union agreement benefit has not been fully quantified. Shareholders are paid a 2.1% dividend. The Deutsche Bank price target for the stock is $160, and the consensus figure stands at $153.74. Boeing shares were trading at $125.25 late on Friday.

Cardinal Health Inc. (NYSE: CAH) is a top name in the health care sector. The drug wholesaler’s board also recently authorized an additional $1 billion in stock repurchases. The new authorization is in addition to the company’s existing stock repurchase plan, which has $350 million remaining. The company is projected to grow earnings by 10.4% to $4.07 in 2015. For 2016, Cardinal Health is projected to increase earnings by 11.3% to $4.53. Investors receive a 1.8% dividend. The Deutsche Bank price target is $66. The consensus price objective for the stock is $77.06. Shares were trading at $66.80 in late Friday trading.

Comtech Telecommunications Corp. (NASDAQ: CMTL) designs, develops, produces and markets innovative products, systems and services for advanced communications solutions. The company believes many of its solutions play a vital role in providing or enhancing communication capabilities when terrestrial communications infrastructure is unavailable, inefficient or too expensive. It conducts business through three complementary segments: telecommunications transmission, RF microwave amplifiers and mobile data communications. The company sells products to a diverse customer base in the global commercial and government. Investors are paid a solid 3.9% dividend. The consensus price objective is $35.25, and its shares were trading at $30.50 late on Friday.

Curtiss-Wright Corp. (NYSE: CW) is a global innovative company that delivers highly engineered, critical function products and services to the commercial, industrial, defense and energy markets. The company recently purchased 100% of CCRS, a leading U.K. provider of ultra-smooth and corrosion resistant coatings and precision airfoil repair services for aerospace and industrial turbine applications. The acquired business will operate within Curtiss-Wright’s Commercial/Industrial segment. The Deutsche Bank price target is $71, and the consensus target is $$68.50. Investors are paid a small 0.7% dividend. Shares were trading near $59.00 late on Friday.

Even with the market rebounding, many people are still concerned over the situation in some of the more troubled emerging markets. Investors who are looking to diversify away from the current problems in those markets can certainly feel comfortable with some of the top stocks to buy from the Quant team at Deutsche Bank.

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