Vlastelica reports, “The firm’s advice: Buy companies that don’t spend a lot on salaries, and which pay a lot in taxes. Both qualities, the investment bank wrote in a note to clients published late Wednesday, are poised to outperform in the economic environment, with the former avoiding a cost as wages rise, while the latter has the most to gain from the massive tax cuts Trump is expected to pursue.”
“The investment bank created a ‘basket’ of securities with higher tax rates, the median stock of which had a 10-year median rate of 38%, compared with 31% for the median component of the S&P 500,” Vlastelica reports. “Technology companies, which tend to have fewer employees than other industries, were again the most heavily weighted sector in the basket, comprising 26% of the total. The components include Apple Inc., Skyworks Solutions Inc., and Qualcomm Inc.. The implied labor cost of Apple, as a percentage of its total revenue, is 2%, while it is under 1% for the others.”
Read more in the full article here.
MacDailyNews Take: Makes more sense than the readings of the entrails performed by the technical analysts.
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