Garnry’s methodology is to sift through stocks and identify those that are “decoupled from the market.”
Saxo Bank looks for European stocks in which returns generally are aren’t tied to the movement of the overall stock market, and then factors in quality variables such stable or rising earnings per share estimates and high return on invested capital.
Garnry’s top 20 picks are:
2. Paddy Power
6. William Hill
9. Yara International
10. Novo Nordisk
13. Cie Generale d’Optique Essilor International
14. London Stock Exchange
16. Zodiac Aerospace
17. Nokian Renkaat
20. Swedish Match .
Garnry acknowledged that his list was not exhaustive, and of course would not guarantee returns, but “this approach quantifies the stocks that are least likely to move in tandem with the Stoxx 600.”
At the same time, “all of the companies listed in the second table have a high return on invested capital, which is normally a sign of quality in the underlying business,” he wrote in a research note.
—By CNBC Associate Editor Shai Ahmed
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Disclosure information was not immediately available for Peter Garnry or Saxo Bank.