Crypto and more: Barclays says these 10 stocks are set to outperform

Published Sun, Oct 31 202111:30 PM EDTUpdated Mon, Nov 1 20216:39 AM EDT

Lucy Handley @in/lucy-handley-b2b0a61a/@lucyhandley

Analysts at investment bank Barclays have named a raft of stocks "overweight," expecting them to outperform the wider market. Picks include several U.S. tech firms, including a cryptocurrency mining firm. Barclays' overweight-rated stocks are those its analysts expect to outperform the relevant Bloomberg index over a six-month period. Tech Cryptocurrency miner Argo Blockchain is "the strongest link in the chain," according to Barclays' analysts, who also described it as "a way to lever exposure to bitcoin," with a "compelling entry point at current price levels." Barclays initiated coverage of several cloud providers on Oct. 20. The bank is more constructive on the sector than consensus and it believes the market is underestimating the size of cloud adoption by large firms. "Our Overweights … are well positioned against one or more of our key themes: enterprise spending growth; enabling the higher-stakes digital customer service required by e-commerce; and the promising long-term prospects for cloud voice," the analysts stated. Cloud voice refers to a virtual telephone system. The cloud stocks on Barclays' overweight list include voice and messaging platform Bandwidth , business continuity firm Everbridge , collaboration software firm RingCentral , customer support company ZenDesk and marketing tech firm Zeta . Health care Barclays upgraded drug company Merck from equal weight to overweight on Oct. 19. Recent underperformance represents "a clear buying opportunity for this company which continues to demonstrate positive EPS momentum," the analysts said. EPS refers to earnings per share, a key measure of a stock's performance. Barclays expects an earnings beat when Merck reports third-quarter earnings on Nov. 11. Pharmaceuticals company Argenx was upgraded by Barclays on Oct. 19, with analysts saying its efgartigimod drug, which treats autoimmune diseases, is set to be approved by the U.S. Food and Drug Administration in December. This is set to be the "positive catalyst that drives a broad-based reassessment of the company," the analysts said. Consumer Food company Sovos Brands is "the fastest growing food company of scale in the U.S.," according to Barclays, which started covering the stock on Oct. 18. Analysts called it a "Rao of light," referring to the company's flagship Rao's Homemade sauces. "We believe Rao's sauce is expected to drive ~50% of SOVO's revenue growth from 2020 to 2023, implying a ~+12% CAGR [compound annual growth rate]," the analysts stated. Barclays upgraded C & C Group , an alcohol business, to overweight from equal weight on Oct. 18. Some of the firm's companies are set to raise their prices in November due to supply chain pressures, according to a report on trade website the Morning Advertiser.

Barclays Bank's UK headquarters in Canary Wharf, London.

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