Proactive Investors - Royal Mail (LON:IDSI) owner IDS, miners Anglo American (LON:AAL) and Antofagasta (LON:ANTO) plus housebuilder Persimmon (LON:PSN) are among the UK’s most vulnerable stocks if the economy turns down sharply, according to UBS.
In that scenario, these companies look exposed says the bank, which has crunched some numbers based on volatility, negative earnings momentum, high valuations and a sell or neutral rating from its in-house analysts.
Even if GDP doesn’t fall as much as expected the impact on margins will be severe and investors will take a more cautious risk about holding shares, hitting valuations of what it suggests are some of the weakest FTSE 350 members.
In addition to the four above, other UK-listed businesses that scored badly included Abrdn, Johnson Matthey (LON:JMAT), St. James’s Place PLC (LON:SJP) and Travis Perkins (LON:TPK).
Special mention must go to German electricals group Siemens, which got a big red flag in every one of UBS’s three categories, something also achieved by Dutch payments group Adyen and German materials group Lanxess.
There is some good news. UBS also flipped its research around and came up with a list of possible winners if it all hits the fan.
While none scored three blues among the flags of lower volatility, positive earnings momentum and a buy rating, the best-rated of the UK-listed bunch were BAe Systems, Balfour Beatty (LON:BALF), insurer Phoenix and Tesco (LON:TSCO).