Equity Solutions is a team of 18 highly-qualified equity experts constantly looking for the best market opportunities in the world’s top industries. Its research is distributed to clients and SG business partners, including portfolio managers and advisors.
The team main mission is to share its strong experience of stock picking – 15 years on average – by offering the best possible professional advice to our clients. To achieve our target, we adopt a long-term approach with a wealth management angle to select opportunities most in line with your investment needs. Most companies we pick are longstanding leaders or challengers in their sectors. However, when offering opportunistic investments, our experts can also select companies that innovate and act as disruptive players. The stocks entering our selection must show sound fundamentals, promising perspectives and have to be undervalued.
Equity Solutions issues also thematic reports allowing investors to take advantage of sources of dynamic growth identified along with the strategy team..
Our chosen 12-month investment horizon aims at ensuring that our clients’ capital is preserved. Our reports include explicit buy/neutral/sell recommendations on single stocks together with target prices. Our expert offer a deep follow-up of these recommendation and adapt the views to both the company equity stories and the market valorisation.
Our recommendations are based on a four-pillar approach. The first three (cash flow, growth and profitability) are business risk indicators, which we use to analyse the sustainability of cash flow generation and the company’s growth potential. We want to avoid cash-destructive companies as growth should not be achieved at the cost of profitability. The fourth pillar, valuation, is all about paying the right price and focusing on the stocks offering the best upside versus comparables.
Our stock selection derives from the following three-stage filtering process:
- Stage 1 - Investment Universe (selection from the main companies listed across the globe)
Our Investment Universe of around 3,200 stocks is the result of a screening process based on several criteria among which market capitalization, liquidity and the exclusion lists provided by Societe Generale’s ethics team. We aim at only including companies providing their shareholders with regular financial reports.
- Stage 2 - Recommended Universe (selection from the Investment Universe)
We select these companies from our Investment Universe using multiple factors to identify high-quality companies with attractive growth prospects. Our experts focus on companies that are likely to outperform their regional sector benchmark over a 12-month period. Sector-wise, this universe has a structure similar to the world’s leading equity benchmarks.
- Stage 3 - Convictions Universe (selection from the Convictions Universe)
We pick the stocks from our conviction list based on their individual upside potential (10% minimum over a 12-month horizon) rather than their likely performance on a relative-value basis. Given our bottom-up approach allows us to exclude macro-economic and strategic constraints, our baskets of stocks cannot be considered as portfolios. There are – most of the time – benchmarked.
We are more than experts, we are equity market enthusiasts. Our DNA is to judge whether an investment offers upside potential but also to hunt for fundamentally-sound stocks. In short, our thorough analysis and strict methodology allow us to detect stocks offering upside potential in the longer term.