The London Stock Exchange Group’s StarMine Intrinsic Valuation Model is a quantitative model that measures how attractively valued a stock is relative to it’s true, or “intrinsic” value. That model in turn isOver the past 12 months, the model has a decile spread of 23 per cent for all U.S. stocks. This means that the top 10 per cent as a group has outperformed the bottom 10 per cent by 23 per cent.
Replicating the top/bottom 10 per cent strategy would involve more than 400 companies so, for simplification, we screen for the top 1 per cent, relative to the model’s coverage of more than 21,000 stocks across the world. In addition to the massive structural supply-demand imbalance, there are political tailwinds. Housing availability is a key priority of the Biden administration and should continue to be a priority for whichever party wins the White House for the next four years.
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