Anika Begay
Macquarie has named its 10 “highest conviction” stocks that it believes present buying opportunities for investors amid ongoing market volatility and a sharp sell-off in global markets. The Australian investment bank’s analysis comes as markets grapple with concerns about a potential US recession and the unwinding of the Japanese yen carry trade. In response, Japanese stock markets fell more than 12% on Monday before paring those losses on Tuesday, while the S&P 500 suffered its worst daily performance in nearly two years with a 3% drop in one day. Technology and banking stocks were among the hardest hit sectors. Amid the turbulence, Macquarie has unveiled its list of top picks, focusing on companies that still have their strong fundamental growth drivers intact. The stocks below, according to the bank’s analysts, have “borne the brunt of the recent decline” but are expected to emerge stronger as the current wave of volatility subsides. TSMC, Hitachi, TEL, NEC, SK Hynix, Wiwynn, Alchip, Sugi, Daiichi Sankyo and HD Hyundai Electric were among the “most compelling” stock ideas. Most of the stocks also trade in the U.S. over-the-counter, albeit on low volume. “As stock pickers, we are focused on a basket of stocks that we believe will emerge from the current decline and present a buying opportunity for investors as this bout of volatility subsides,” Macquarie equity strategists led by Peter Williamson said in a note to clients on Aug. 6. Notably, the list is heavily weighted toward the technology sector, particularly semiconductor companies. That focus comes despite recent concerns about graphics processing unit maker Nvidia, which Macquarie believes are “overblown.” The pick also includes companies from Japan, South Korea and Taiwan, reflecting Macquarie’s view of the resilience of some Asian markets. While acknowledging the complexity of the current market environment, Macquarie remains optimistic about the long-term prospects of its chosen stocks. The bank noted that these companies have “fundamental growth drivers that we expect to withstand these emerging macro uncertainties.”
