BofA institutional clients dump stocks at historic rate, retail keeps buying
Investing.com -- In its latest equity client flow trends note, Bank of America analysts revealed a notable divergence in equity flows, with "Institutional selling accelerat[ing] vs hedge funds & retail buying."
Last week, despite the S&P 500 rising 1.5%, BofA's clients were "modest net sellers of U.S. equities," driven by single stock sales, though ETFs saw inflows.
The selling was primarily fueled by "institutional clients, who have sold for five weeks straight."
BofA states that "Cumulative selling by this group YTD is the largest of any comparable period in our data history and the largest since '17 when normalized by market cap."
In contrast, "Hedge funds were buyers for a second week," and "Private clients also were buyers and have now been buyers in 25 of the past 26 weeks (a record buying streak in our history)," said the bank.
Corporate client buybacks also "accelerated week-on-week and were above typical seasonal levels for the first time in four weeks."
Clients divested from stocks in five sectors, with "Staples," "Financials," and "Comm. Services" leading the outflows.
Conversely, "Consumer Discretionary saw the biggest inflows, with inflows for 7 straight weeks (the longest recent buying streak of any sector)."
A preference for domestically oriented sectors over globally-exposed ones was also observed, with clients being "bigger buyers (or smaller sellers) of domestics for the last six weeks."
BofA's valuation work suggests that tariffs and de-globalization are largely "priced in" for domestically-oriented stocks.
In the ETF space, clients reportedly bought for the first time in three weeks, favoring "Blend and Value ETFs" while selling "Growth ETFs."
Related articles
BofA institutional clients dump stocks at historic rate, retail keeps buying
Here's why Citi says Apple stock is 'set up well' for 2026
BAM selloff called 'tactical buying opportunity' by Scotiabank
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Analysis-As global tumult grows, UK Plc's stability and bargains appeal to dealmakers
By Amy-Jo Crowley, Yadarisa Shabong and Purvi Agarwal LONDON (Reuters) -More than $10 billion in bids for British companies announced on Monday, this year's busiest day according to Dealogic data, showed how low valuations and the market's relative stability were attracting rivals and funds after a volatility-induced pause. Companies may also be using the opportunity to enter the UK market before potential further weakening of the dollar or strengthening of the pound made future transactions more expensive, analysts said. Among those to announce takeover offers for UK firms on Monday were U.S. chipmaker Qualcomm, private equity firm Advent, and France's L'Oreal. While U.S. President Donald Trump's announcement of sweeping tariffs and the resulting volatility hampered dealmaking for weeks, some companies are now finding the right conditions to agree on transactions. Niccolo de Masi, CEO of Maryland-based IonQ, which on Monday announced a $1.08 billion acquisition of British quantum computing firm Oxford Ionics, said that in addition to Britain's talent pool, the geopolitical backdrop made the deal more compelling as governments want more "sovereign quantum networks," he said. "People want things on-premise and they want things to be local," de Masi told Reuters. So far this year, there have already been 30 bids for UK companies valued at more than 100 million pounds ($135.44 million), compared with 26 over the same period of last year and 45 for the whole of 2024, according to Peel Hunt. The total value of 24 billion pounds of deals announced to date compared with 36 billion pounds in the year-ago period, which was skewed by a few large deals, such as International Paper's $7.1 billion bid for D.S Smith. Years of outflows from UK equities that depressed valuations for British companies compared with their competitors listed on other European or U.S. exchanges, have played a role in making them more attractive as acquisition targets. For example, the discount between the FTSE 100 [.FTSE] and the U.S. S&P 500 [.SPX] benchmarks peaked at about 49.5% in January and is about 41% now. "Management teams have been happier to accept bids because sometimes that is an easier way to crystallize the valuations and as equity markets have been so challenging for so long," Amanda Yeaman, co-manager of the abrdn UK Smaller Companies Fund and the abrdn UK Smaller Companies Growth Trust plc. Moreover, bidders are being drawn to a relatively stable UK economic and political backdrop. "We now have an improving economic environment in the UK, and the regulatory position is much more predictable," said Charles Hall, head of research at Peel Hunt. "Buying a UK company at the moment is likely to be less risky than, say, buying a U.S. business." The trade deals that Britain has pursued also show the country is "open for business," Yeaman said. And with no general election due soon, Britain promises political stability. "Our markets really like stability and for the next four years, that is something that we have, which is less predictable in other geographies," she said. Analysts also say the pound's strength does not seem to act as a deterrent. "Particularly global investors, U.S. investors are thinking, let's grab as much as we can before things get more expensive and currency tailwinds are still there," said Magesh Kumar, equity strategist at Barclays. This year's largest bids so far were all announced this week, with Advent offering 3.7 billion pounds for scientific instruments maker Spectris and Qualcomm's 1.8 billion pound bid for Alphawave, and some advisers expect many more to come. Erik O'Connor, partner at Clifford Chance, said that while economic uncertainties could weigh on the M&A market, factors such as more predictable outlook for interest rates and UK companies' improved balance sheets should encourage dealmaking. "There's a sense that key fundamentals are in the right place to transact," O'Connor said, pointing to technology and real estate, the busiest sectors so far this year according to Dealogic, as those less susceptible to recent market volatility. "I would not be surprised if we continue at a similar pace," he said. ($1 = 0.7383 pounds) Sign in to access your portfolio
Business Insider
an hour ago
- Business Insider
Broadcom Stock (AVGO) Primed to Maintain Long-Term Uptrend as Indices Return to Mean
Broadcom (AVGO) presents a strong investment opportunity, driven by its strategic focus on value creation within the rapidly evolving advanced technology space. As a key enabler of AI, Broadcom goes beyond hardware—its high-margin ecosystem, powered by AI and enterprise software, adds significant long-term appeal. While the stock may appear expensive at first glance, its valuation is justified by the company's foundational role in AI infrastructure and the robust, secular growth trends it continues to ride. Confident Investing Starts Here: In terms of raw performance, AVGO stock has outperformed the market by a substantial margin over the past year. Further underpinning the bullish theme, broader U.S. stock indices such as the Dow Jones, Nasdaq, and S&P 500 are all back at their historic highs, having shaken off the macroeconomic shock of a U.S.-China trade war. Given the solid fundamentals and strong outperformance, I think AVGO serves as a superb addition to any investor's portfolio; I'm stoutly bullish. Broadcom Is a Next Generation Technology Enabler Broadcom's latest quarterly results underscore the flawless execution of its strategy. The company reported impressive revenue of $15 billion, up 20% year-over-year. AI Semiconductor sales surged 46% to $4.4 billion, while Infrastructure Software revenue reached $6.6 billion, marking 25% growth. Free cash flow reached $6.4 billion, accounting for 43% of revenue and representing a 44% year-over-year increase. Guidance for fiscal Q3 2025 further strengthens the bullish outlook. Broadcom projects $15.8 billion in total revenue, reflecting a 21% year-over-year increase. AI Semiconductor sales are expected to rise 60% to $5.1 billion, and Infrastructure Software revenue is projected to grow 16% to $6.7 billion. These results and forward-looking projections reflect Broadcom's consistent value creation and operational discipline. Under CEO Hock Tan's leadership, the company has demonstrated mastery in driving growth, executing strategic mergers and acquisitions, and optimizing internal efficiencies—all with a clear focus on long-term shareholder value. Broadcom Is Constructing an AI Infrastructure Fortress Broadcom sits at the heart of the AI boom, strategically investing in custom silicon and high-performance networking, both of which are foundational to the long-term economics of AI infrastructure. Major hyperscalers are increasingly relying on Broadcom's custom application-specific integrated circuits (ASICs) to power their AI workloads, and this reliance is poised to grow. CEO Hock Tan projects the current 60% year-over-year growth in AI semiconductor revenue will extend into Fiscal 2026, driven by the multi-year expansion of AI infrastructure, the rising complexity of AI models, and continued investment across both training and inference. Beyond custom silicon, Broadcom is a significant force in AI networking through its Tomahawk and Jericho switch families—critical technologies for interconnecting large-scale AI clusters. The Tomahawk 6, for example, delivers up to 102.4 terabits per second of switching capacity, enabling the performance demands of next-gen AI systems. AI networking, which already accounts for approximately 40% of Broadcom's AI revenue, is expected to grow sharply, and a year-over-year increase exceeding 170% in this segment would not be surprising. Broadcom Also Has a Software Profit Engine Despite initial skepticism, Broadcom's acquisition and integration of VMware has been a masterful example of disciplined, long-term value creation. Broadcom's strategy for VMware to become a high-margin, recurring software business is beginning to take shape. Broadcom has made significant strides in converting VMware's customers to a subscription-based business model. For example, greater than 87% of VMware's top 10,000 customers have adopted the VMware Cloud Foundation (VCF) subscription, with the conversion expected to occur primarily over the next 12-18 months. This change has significantly improved Broadcom's infrastructure software operating margins, which increased from 60% to 76% in Fiscal Q2 2025. I expect further margin improvement as the company continues to roll off legacy contracts and solidify its subscription base. Financial Masterplanning at Broadcom Broadcom exemplifies disciplined financial management, with robust free cash flow and strong returns on deployed capital forming the backbone of its investment appeal. In Fiscal Q2 2025, the company delivered a record $6.41 billion in free cash flow—an impressive 43% of revenue—and this level of cash generation is expected to persist. Free cash flow remains the engine that drives Broadcom's ability to invest, deleverage, and return capital to shareholders. Following its earnings release, Broadcom reduced its gross principal debt from $69.4 billion to $67.8 billion, reaffirming its commitment to maintaining a 2x debt-to-EBITDA ratio. Management has been clear: cash not allocated to dividends will be prioritized for debt reduction. At the same time, Broadcom continues to return capital to shareholders on a large scale. In Q2 alone, the company paid out $2.8 billion in dividends and repurchased $4.2 billion in stock. In April, the Board authorized a new $10 billion share repurchase program, which will run through the end of 2025, signaling strong internal confidence in the company's long-term prospects. As free cash flow accelerates and debt is further reduced, this disciplined approach could create a compounding effect on earnings per share. Should the stock experience a pullback to technical support levels, I believe it could present an attractive entry point toward achieving a 30% annual return target. Is Broadcom a Buy, Sell, or Hold? Broadcom has a consensus Strong Buy rating on Wall Street based on 27 Buys, two Holds, and zero Sells. The average stock price target for AVGO is $289.60, indicating a potential return of 18% over the next 12 months. I'm Staying Bullish on Broadcom In my view, the convergence of accelerating AI-driven revenue, expanding high-margin software contributions from VMware, and Broadcom's disciplined capital allocation creates a particularly compelling investment case. These factors form the core of my thesis for achieving an annual return in the 30% range over the coming years. While the company continues to actively pursue strategic acquisitions, it is also steadily building long-term value through foundational infrastructure and prudent financial stewardship. With strong momentum, exceptional leadership, and a clear growth runway, Broadcom stands out as a high-quality opportunity in a transformative sector.
Yahoo
an hour ago
- Yahoo
Celsius Holdings Inc. (CELH) Dips More Than Broader Market: What You Should Know
In the latest trading session, Celsius Holdings Inc. (CELH) closed at $42.07, marking a -1.13% move from the previous day. The stock fell short of the S&P 500, which registered a loss of 0.27% for the day. Shares of the company have appreciated by 12.18% over the course of the past month, outperforming the Consumer Staples sector's gain of 1.96%, and the S&P 500's gain of 6.9%. The investment community will be paying close attention to the earnings performance of Celsius Holdings Inc. in its upcoming release. It is anticipated that the company will report an EPS of $0.22, marking a 21.43% fall compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $628.17 million, indicating a 56.27% increase compared to the same quarter of the previous year. For the annual period, the Zacks Consensus Estimates anticipate earnings of $0.81 per share and a revenue of $2.17 billion, signifying shifts of +15.71% and +60.16%, respectively, from the last year. Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Celsius Holdings Inc. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability. Our research shows that these estimate changes are directly correlated with near-term stock prices. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system. The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 13.76% downward. Celsius Holdings Inc. currently has a Zacks Rank of #3 (Hold). Looking at valuation, Celsius Holdings Inc. is presently trading at a Forward P/E ratio of 52.67. This indicates a premium in contrast to its industry's Forward P/E of 16.38. It is also worth noting that CELH currently has a PEG ratio of 1.54. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Food - Miscellaneous industry had an average PEG ratio of 1.62. The Food - Miscellaneous industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 160, which puts it in the bottom 35% of all 250+ industries. The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Be sure to use to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Celsius Holdings Inc. (CELH) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
