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Best oversold stocks and worst crowded shorts from Citi’s quant team

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Jun. 10, 2023 6:55 PM ETAT&T Inc. (T)M, SIRI, DISH, EQT, XLE, XLV, XLF, XLI, XLK, XLY, AMZN, SCHW, GPN, BBWI, JWN, JBLU, LUMN, AKAM, KSS, VFC, WOLF, ALL, NSC, ENTG, KRC, IP, SLG, SWN, VNO, SWK, AAP, DEI, SIX, CLF, EW, J, HBI, CTRA, LNC, WU, BXP, LAD, HR, UAA, BIO, IART, NM, BALL, JLL, EPR, GNRC, HPP, CHTR, TRIP, NCLH, AMC, AAL, CFG, TDOC, RUN, MTCH, LYFT, NET, PK, CVNA, EQH, COIN, XLC, CLVT, ZM, RPRX, HOOD, CHPT, WOOF, OPEN, S, EHABBy: Kim Khan, SA News Editor21 Comments

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The Citi quantitative team is still confident about its Oversold Strategy, despite a second stumble in returns this year.

“Our systematic Oversold Strategy posted its second loss (-4%) this year in May, as the equity market is following more closely on the credit market,” Hong Li, head of U.S. equity quantitative trading strategy, wrote in a note. “However, we believe that the continued uncertainty is still conducive to the strategy going forward, as it is not predicated on the overall market being oversold.”

Li provides attractive oversold stocks that have a Citi Buy rating.

The stocks by sector are:

Communication Services (XLC)

  • AT&T (NYSE:T)

Consumer Discretionary (XLY)

Financials (XLF)

  • Schwab (SCHW)
  • Allstate (ALL)
  • Global Payments (GPN)
  • Equitable Holdings (EQH)

Healthcare (XLV)

  • Edwards Lifesciences (EW)
  • Royalty Pharma (RPRX)
  • Bio-Rad Labs (BIO)

Industrials (XLI)

  • Norfolk Southern (NSC)
  • Jacobs Solutions (J)

Materials (XLB)

  • Ardagh Metal (AMBP)

Real Estate (XLRE)

  • American Tower (AMT)
  • Crown Castle (CCI)
  • SBA Communications (SBAC)
  • Weyerhaeuser (WY)
  • Alexandria Real Estate (ARE)
  • Sun Communities (SUI)
  • Essex Property Trust (ESS)
  • Apartment Income (AIRC)

Utilities (XLU)

  • DTE Energy (DTE)

Citi also listed the most crowded shorted stocks (all stocks have a Neutral rating unless otherwise noted):

Communication Services (XLC)

  • Charter Communications (CHTR)
  • Sirius XM (SIRI), Sell
  • Match Group (MTCH)
  • AMC (AMC), Sell
  • Tripadvisor (TRIP)
  • Lumen Technologies (LUMN), Sell
  • Dish Network (DISH)

Consumer Discetionary (XLY)

  • Bath & Body Works (BBWI)
  • VF (VFC)
  • Norwegian Cruise Lines (NCLH)
  • Lithia Motors (LAD)
  • Advance Auto Parts (AAP)
  • Macy’s (M)
  • Newell Brands (NM)
  • Nordstrom (JWN)
  • Six Flags (SIX)
  • Kohls (KSS)
  • Petco (WOOF)
  • Carvana (CVNA)
  • Hanesbrands (HBI)
  • Under Armour (UAA)

Energy (XLE)

  • Coterra Energy (CTRA)
  • EQT (EQT)
  • Southwestern Energy (SWN)

Financials (XLF)

  • Citizens Financial (CFG)
  • Coinbase (COIN)
  • Robinhood (HOOD)
  • Western Union (WU)
  • Lincoln National (LNC)

Healthcare (XLV)

  • Teladoc (TDOC)
  • Integra Life Sciences (IART)
  • Enhabit (EHAB)

Industrials (XLI)

  • Stanley Black & Decker (SWK)
  • American Airlines (AAL)
  • Generac (GNRC)
  • Clarivate (CLVT)
  • Sunrun (RUN)
  • Lyft (LYFT)
  • ChargePoint (CHPT)
  • JetBlue (JBLU)

Info Tech (XLK)

  • Cloudflare (NET)
  • Zoom Video (ZM)
  • Entegris (ENTG)
  • Akamai (AKAM)
  • Wolfspeed (WOLF)
  • SentinelOne (S)

Materials (XLB)

  • Ball (BALL)
  • International Paper (IP)
  • Cleveland-Cliffs (CLF)

Real Estate (XLRE)

  • Boston Properties (BXP)
  • Healthcare Realty (HR)
  • Jones Lang LaSalle (JLL)
  • Kilroy (KRC)
  • EPR Properties (EPR)
  • Park Hotels & Resorts (PK)
  • Vornado (VNO)
  • Douglas Emmett (DEI)
  • Opendoor Technologies (OPEN)
  • SL Green Realty (SLG)
  • Hudson Pacific Properties (HPP)

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