Credit Suisse says that buying stocks is this feature popularized by Warren Buffett
Credit Suisse recommends stocks with the theme preferred by Warren Buffett for investors who are dealing with increased risk in the stock markets. The company anticipates that companies with “economic moats” can help investors protect their portfolios from increased economic uncertainty. It is a term popularized by the legendary investor which refers to a company’s ability to maintain competitive advantages against its peers, such as a better business model or scale. “The most important thing [is] Trying to find a company with a wide, long-running moat around it… protecting an impressive economic castle with an honest gentleman in charge of the castle, Buffett said at a 1995 meeting, according to the Warren Buffett Archive on CNBC. Credit Suisse identified the bottom – opportunities in companies with high barriers to entry, just as the overall risk is high, the company’s strategists pointed to crackdown on inflation by central banks around the world, as well as the increased risk of 2023 earnings estimates, and recommended investors to cut stock weight. “Our economists do not rule out a recession and expect US GDP growth to be 0.9% in 2023, compared to -0.2% in the eurozone,” analyst Richard Kersley wrote in a note on Thursday. However, there are opportunities in companies with pre-emptive protection. Trenchers, which has “super innovation capacity” with strong pricing power. Below are the names. Shares of Air Products & Chemicals could rise more than 20% from here as the company has “among the most flexible business models,” where it is difficult to transport gases over long distances, according to Credit Suisse. The company has a $295 price target on the company, and shares closed Wednesday at $241.46. Hershey’s was approved by the company as it is “preparing for a year of above-algorithm (5%) growth in 2022” due to its leading market share in the confectionery industry, according to the memo. Credit Suisse has a price target of $250 on the company, which is 11.9% up from Wednesday’s closing price of $223.41 per share. Market share gains are likely to continue into 2022 and possibly beyond because retailers have given the company more shelf space, according to the note. McDonald’s is “well positioned” to perform regardless of the overall background due to its ground-breaking value proposition, according to Credit Suisse. Read the note The fast food company is also recovering in overseas markets. Other companies with protective moats in the Americas include Microsoft, Nextera, and Autodesk. —CNBC’s Michael Bloom contributed to this report.
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