In contraction,
Investors expect the US Dollar to rally, undermining equities and furthering
headwinds to S&P 500 EPS and also amplified stress for EM borrowers (USD
denom. debt).
History says that
the consensus is wrong and counters intuitively, when the Fed moves to neutral
from easy (11 most recent cycles), USD weakened 55% of the time, with a median
decline of 7% in the first year.
Below I've implemented
screen results of stocks that might benefit from rising rate hikes. Stocks from
the screen have fulfilled the following criteria:
Stock selection
criteria...
(i) Stock’s price
correlation to the USD (DXY Index) from 5/2014 – 3/2015 is less than -0.40
(ii) Mean implied
upside based on analyst target prices is positive
(iii) P/E (‘15E
and ‘16E) is below 25X but consensus EPS is positive
(iv) FCF yield is
above 3%
(v) Company beat
consensus EPS expectations the last 2 quarters.
Here are the 20
best yielding results in detail....
