UBS analyst Pieter Stoltz caused value stocks to outperform in 2021 due to their greater exposure to the economic recovery, with the warning that once the US achieves immunity collective in the third quarter of 2021, the world could return to low growth and low rate world.
In this scenario, UBS made growth and defensive income companies do well in 2022, just as they did well in 2019.
Its top value stock picks today are Qantas, Graincorp, Downer, Humm and Select Harvests, with defensive growth and income stocks like ResMed, Carsales, CSL and Charter Hall likely to come back in favor in 2022.
The broker also wrote that the boiling Australian housing market should help Boral, Super Retail, Adairs and James Hardie in the future. However, he warned that exposed housing stocks were already one of the strongest macroeconomic themes since last November, when vaccine optimism intensified.