Stock Picks to Buy, Best ESG Value Investments: Lori Calvasina, RBC – Business Insider

The sell-off in tech stocks and the sudden rise of value stocks has grabbed investors’ attention, but it doesn’t have to take precedence over everything else.

RBC experts Sara Mahaffy, an equity strategist, and Lori Calvasina, the firm’s head of US equity strategy, track the way socially conscious investors and funds are investing their money. They also keep an eye on these companies’ behavior and the news coverage they’re attracting.

Over the last couple of years socially responsible investing has shed its feel-good rep to become a major force on Wall Street, and one that companies have to take into account. Mahaffy and Calvasina say there is now $1 trillion invested in sustainable funds.

Their work can help investors keep track of what ESG funds and their leaders are doing, and keep up with market sentiment and important trends. But these days they’re also applying a value-oriented approach because of investors’ overwhelming interest in that theme.

Companies that are expected to bring in above-average profit or revenue growth have been favorites on Wall Street for more than a decade, in part because economic growth was so sluggish in the wake of the Great Recession . That meant investors were more than willing to pay top dollar for growth wherever they could find it.

But that may have shifted for the long term — or so value investors hope. Traditional value stocks in industries like banking and energy started to perform better after the introduction of COVID vaccines, and their returns hit another level as investors became more focused on a stronger economy, greater inflation, and impending increases in interest rates.

All of that tends to be better for value — or at least it’s less favorable for growth.

So the RBC duo pulled together a list of stocks that they say are among the top 25% of the most popular companies in their industry among ESG-focused actively-managed and passive sustainable funds; that have “Outperform” ratings from RBC’s analysts; and that “currently rank in the top two quintiles on Bloomberg’s Value factor within their global universe.”

Those stocks can be found below, ranked from lowest to highest based on how much upside to their price targets RBC believes they have. These figures were calculated based on Tuesday’s closing prices.