Big banks publish stock lists all the time, and most are just repackaged momentum. The newest one from UBS takes a different route, screening for companies that grow fast, turn that growth into cash, and still trade cheaply against both. The result is a 56-stock basket of US companies the bank argues the market has mispriced.
What the screen actually measures
The basket carries a 15% forward sales compound annual growth rate, roughly twice the 7% pace of the equal-weighted S&P 500. Compound annual growth rate is the smoothed yearly rate at which revenue is expected to grow.
The second filter is cash-flow return on investment, the UBS HOLT measure of how much cash a business generates per dollar invested. Median cash-flow return on investment for the group sits at 34% against 19% for the broader market.
The third leg is improving earnings momentum, meaning analyst profit estimates are moving up rather than down. UBS screened for valuations at or below the level that growth and profitability would normally imply.
Chips carry the list
Semiconductors and adjacent technology names make up a significant portion of the 56. NVIDIA, Broadcom, and Microsoft sit among the largest members.
Advanced Micro Devices, Micron Technology, and Dell Technologies also appear. Analog Devices, Marvell, Teradyne, and Amphenol round out the hardware cluster.
Software and platforms show up through Salesforce, Autodesk, and Uber. The full list stretches to eBay, Expedia, Match Group, and Instacart.
Beyond technology names
The basket spans financials, industrials, consumer companies, energy, health care, and transportation. American Express, BlackRock, Nasdaq, and Intercontinental Exchange cover the financial side.
Health care enters through AbbVie, Cigna, IQVIA, and HealthEquity. Industrials include TransDigm ($TDG), Westinghouse Air Brake, Otis, Trane Technologies, and Hubbell.
Real estate and energy get representation from CBRE, Targa Resources, and Antero Midstream. Deckers Outdoor and Tapestry handle consumer exposure.
How the call fits the market
UBS expects the rally to keep running, forecasting the S&P 500 at 8,400 by June next year. The bank points to artificial intelligence spending, corporate profits, and steady economic growth as the supports, while acknowledging volatility along the way.
Marvell raised its fiscal 2028 revenue forecast, topping Wall Street estimates on demand for custom data center chips. UBS cited that as evidence of the AI pull, and the semiconductor weighting in the basket lines up with the same thesis.
Not every strategist is pointing at the same place. The Morgan Stanley US equity team recently named industrials the best risk/reward in the market, noting that 54% of Russell 3000 stocks have fallen more than 20% since June.
UBS runs a separate and much narrower product alongside the screen. Its Tactical Top Picks basket holds 14 high-conviction single-stock ideas, and Johnson Controls ($JCI) and Boeing were added in the Americas on Oct. 5.
That tactical book is a useful reality check on bank conviction lists. Closed ideas this year returned 0.2% on average in absolute terms and lagged their benchmarks by 1.2% over an average 25-day holding period across 72 trades.
A screen is a starting point, not a portfolio. The 56 names share one trait worth tracking, which is cash generation that currently outpaces what their valuations assume.
