HOLT US Market Overview March 11 2022.pdf

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US
ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that
could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
HOLT
®
US Market Overview – March 2022
Finding Growth within Quality and Capital Discipline
within Value
David Rones, CFA
HOLT Investment Strategy
david.rones@credit-suisse.com
Sean Burns
sean.burns@credit-suisse.com
Joseph Pecora
joseph.pecora@credit-suisse.com
Richard Curry PhD
richard.curry@credit-suisse.com
Vishal Bondre
vishal.bondre@credit-suisse.com

HOLT US Market Overview: March 2022
2
Key Debates:
Hyper Growth stocks have underperformed the U.S. market by -18% so far in 2022 and have now cumulatively underperformed since
the start of 2020. Is it time to reengage with the group?
Pages 10-15.
Quality appeals during periods of market uncertainty and Quality stocks, particularly Quality Defensives, have performed admirably
during the recent market weakness. Looking ahead, where are the most attractive opportunities within high Quality?
Pages 16-22.
Value has offered the best offense in 2022 driven by Cyclical Value stocks. Value stocks have meaningfully outperformed over the last
year, profitability forecasts have already improved, and economic growth looks to be slowing. Can the Value rotation continue?
Pages 23-33.
Recent HOLT Investment Strategy documents:
A Bad Stretch for Good Companies Offers a Chance to Selectively Upgrade Quality: HOLT Global Market Overview – Feb 22 / Video Replay
The Prospects for FAAMG after a Decade of Dominance
Hyper Growth Suffered in '21, but Quality and Value Remain More Appealing: HOLT U.S. Market Overview - December 2021 / Video Replay
U.S. Value Stocks are Becoming Harder to Ignore – September 2021 / Video Replay
US Quality Growth with International Value for the Best of Both Worlds – September 2021 / Video Replay
Quality and Growth have decoupled in the U.S. Investors should stick with Quality - HOLT US Market Overview - June 2021 / Video Replay
Investors Have No Appetite for U.S. Defensive Stocks

24%
23%
18%
10%
8%
-11%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Valuation Low Volatility Overall Quality Momentum Growth
Last 12 Months: Q1 Factor vs. Equal Weight Universe
13%
9%
7%
3%
2%
-11%
-15%
-10%
-5%
0%
5%
10%
15%
Valuation Low Volatility Overall Momentum Quality Growth
Year to Date: Q1 Factor vs. Equal Weight Universe
4
The Valuation factor has continued to deliver strong returns in 2022 and
the highest Growth stocks have lagged.
Source: Credit Suisse HOLT, the BLOOMBERG PROFESSIONAL™ service. Data Date: 3/14/2022. Universe = USA Top 1000. Total Returns vs. Equally weighted universe.
Overall Scorecard Score = 33% Quality + 33% Momentum + 33% Valuation. For more on the HOLT Scorecard see HOLT Scorecard & Factor Library Primer

-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Low Volatility
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
High Quality
5
Factor rotations on display.
Cheap Value = Valuation Factor.
Using Region relative Factor Percentiles.
Source: Credit Suisse HOLT, the BLOOMBERG PROFESSIONAL™ service, Data Date: 3/14/2022.
Rolling 12-Month Excess Returns of Factor Top Quintile (Q1) vs Equally Weighted Market (Top 1000 US)
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Cheap Valuation
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
High Growth

31%
19%
17%
13%
2%
-32%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Stable Yield Quality
Defensives
Cyclical
Value
Banks &
Insurance
Quality
Growth
Hyper
Growth
Last 12 Month Total Returns vs. USA Top 1000 Universe
13% 13%
11%
6%
-7%
-18%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
Cyclical
Value
Stable Yield Banks &
Insurance
Quality
Defensives
Quality
Growth
Hyper
Growth
Year to Date Total Returns vs. USA Top 1000 Universe
7
The Hyper Growth segment has continued to lag while Value and
Defensive segments have continued to outperform.
See appendix for segment definitions.

-10
-8
-6
-4
-2
0
2
4
6
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Segment Median Market Implied Yield (MIY) Spread vs Market
Quality Growth Hyper Growth Quality Defensives Stable Yield Banks & Insurance Cyclical Value
High Risk / Required Return
Low Risk / Required Return
8
Dispersion in Market Implied Yields across segments has narrowed,
yet remains very wide relative to history.
Source: Credit Suisse HOLT, Data Date: 3/14/2022. Universe: Top 1000 US companies by TTM market cap. Market Implied Yields for Financial firms on the HOLT
CFROE® model are trimmed by 150 bps throughout this analysis to preserve comparability.

0.9
1.2
-0.2 -0.3
-1.2
-2.6
1.7
2.1
1.5
-0.8 -0.9
-4.5
1.8 1.7
0.2
-0.6
-1.7
-3.2
-5
-4
-3
-2
-1
0
1
2
3
Cyclical Value Banks & Insurance Stable Yield Quality
Growth
Quality
Defensives
Hyper
Growth
Median Market Implied Yield, Spread vs. Market Median
20Yr Median Mar '21 Current
9
A few relative tradeoffs have shifted over the last year.
Source: Credit Suisse HOLT, Data Date: 3/15/2022. Universe: Top 1000 US companies by TTM market cap. Market Implied Yields for Financial firms on the HOLT
CFROE model are trimmed by 150 bps throughout this analysis to preserve comparability.

10
U.S. Hyper Growth Stocks Remain Unappealing

11
Source: Credit Suisse HOLT, the BLOOMBERG PROFESSIONAL™ service, Data Date: 3/10/2022. Universe defined as largest 1000 companies by ttm market cap. Returns equally weighted.
Round Trip Complete – U.S. Hyper Growth is a market-performer since
the beginning of the pandemic.
Hyper Growth - Broadening of Growth may Derail the Hype Train – Feb 2021
Hyper Growth Suffered in '21, but Quality and Value Remain More Appealing – Dec 2021
50
75
100
125
150
175
200
225
Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22
Total Return Since 2020
US Hyper Growth Top 1000 US
Examples of firms that have been
classified as Hyper Growth over the last
year and are more than 50% down from
52-Week highs. Largest names shown.
Ticker Name
ROKU ROKU
ZM ZOOM VIDEO
DOCU DOCUSIGN
PINS PINTEREST
DASH DOORDASH
SHOP SHOPIFY
W WAYFAIR
SQ BLOCK
SNAP SNAP
U UNITY SOFTWARE
PLTR PALANTIR
NET CLOUDFLARE
CHWY CHEWY
SPOT SPOTIFY
SNOW SNOWFLAKE
HUBS HUBSPOT
MDB MONGODB
BILL BILL.COM
TEAM ATLASSIAN

-9.0
-8.0
-7.0
-6.0
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Hyper Growth – Market Implied Yield Spread to US Top 1000
12
U.S. Hyper Growth stocks are still the most expensive market
segment, but the implied yield spread continues to narrow toward the
long-term average level.
March 15th 2022 = -3.2
2018-2019 Average = -3.9
Long-term Average = -2.6
Source: Credit Suisse HOLT, Data Date: 3/14/2022. Universe: Top 1000 US companies by TTM market cap.
Market Implied Yields for Financial firms on the HOLT CFROE model are trimmed by 150 bps throughout this analysis to preserve comparability.

13
Hyper Growth’s growth advantage is forecasted to decline over the
next several years.
Universe: Largest 1000 US companies by TTM market cap, Source: Credit Suisse HOLT, the BLOOMBERG PROFESSIONAL™ service as of 3/10/2022.
Consensus sales growth estimates measured for Hyper Growth constituents as of 12/31/2021.
Long-Term Median: 18.7%
26.9
28.6
22.8
18.0
15.6 15.2
0
5
10
15
20
25
30
35
40
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Median
Sales
Growth
Spread
(Hyper
Growth
-
Universe)
Hyper Growth’s Growth Advantage
Median Sales Growth of Hyper Growth stocks relative to Median Sales Growth of U.S. Top 1000 Companies

-9
-8
-7
-6
-5
-4
-3
-2
-1
0
1
Median Market Implied Yield Spread vs Market
Hyper Growth Quality Growth
14
For investors seeking Growth, CFROI® Revisions, Beta, and Valuation
Spreads make Quality Growth more attractive than Hyper Growth.
Universe: Largest 1000 US companies by TTM market cap, Source: Credit Suisse HOLT, the BLOOMBERG PROFESSIONAL™ service as of 3/14/2022.
Beta calculated using rolling 252-day returns of equally weighted group vs the equally weighted Top 1000 US Companies.
Revisions Valuation
Risk
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
13-Week CFROI Revisions Breadth
(% Positive)
Quality Growth Hyper Growth
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
Rolling 252-Day Beta vs US Top 1000
Quality Growth Hyper Growth

An Allocation to the U.S. Hyper Growth segment remains unattractive.
15
Related: Aiding Software Investors in Pursuit of the next Big Winners
Hyper Growth stocks with CFROI < 5%
(FY-1, LFY, FY1 all less than 5%)
Source: Credit Suisse HOLT Lens™, Data Date: 3/14/2022.
Click here to see full list in HOLT Lens
Hyper Growth stocks with CFROI > 5%
(FY-1, LFY, FY1 all greater than 5%)
Click here to see full list in HOLT Lens
Hyper Growth stocks with expensive valuations and
nascent profitability warrant the most caution…
… though there are some firms exhibiting
evidence of scaling and are worth monitoring.
Name Symbol Mkt Cap
SNOWFLAKE INC SNOW 52.0
CROWDSTRIKE HOLDINGS INC CRWD 42.6
DOORDASH INC DASH 29.8
ZSCALER INC ZS 28.2
CLOUDFLARE INC NET 27.7
OKTA INC OKTA 24.0
UNITY SOFTWARE INC U 22.3
MONGODB INC MDB 20.9
PALANTIR TECHNOLOGIES INC PLTR 20.8
HUBSPOT INC HUBS 19.5
SPLUNK INC SPLK 19.4
BILL.COM HOLDINGS INC BILL 19.4
PLUG POWER INC PLUG 11.2
TELADOC HEALTH INC TDOC 8.7
Name Symbol Mkt Cap
SALESFORCE.COM INC CRM 194.7
SERVICENOW INC NOW 102.2
ATLASSIAN CORP PLC TEAM 62.0
PALO ALTO NETWORKS INC PANW 53.8
MARVELL TECHNOLOGY INC MRVL 53.1
ILLUMINA INC ILMN 47.7
AUTODESK INC ADSK 42.3
DEXCOM INC DXCM 37.8
ZOOM VIDEO COMMUNICATIONS ZM 29.2
TRADE DESK INC TTD 27.5
COSTAR GROUP INC CSGP 21.9
PINTEREST INC PINS 15.2
ROKU INC ROKU 13.9
PAYLOCITY HOLDING CORP PCTY 10.4

16
Stock Selection Within Quality

17
The Profitability advantage of the highest Quality stocks has
continued to expand over the past decade.
Source: Credit Suisse HOLT, Data Date: 2/28/2022. Universe: Top 1000 US Companies by ttm market cap. Uses Region Relative Factor Percentiles.
-5
0
5
10
15
20
25
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022
Median Forecasted CFROI by Quintile of Quality
Q1 Q2 Q3 Q4 Q5
Ticker Name
MSFT MICROSOFT
HD HOME DEPOT
KO COCA-COLA
AVGO BROADCOM
ADBE ADOBE
ACN ACCENTURE
MDT MEDTRONIC
INTU INTUIT
AMAT APPLIED MATERIALS
ADP AUTOMATIC DATA
ADI ANALOG DEVICES
ICE INTERCONTINENTAL EXCH
AON AON
ITW ILLINOIS TOOL WORKS
CL COLGATE-PALMOLIVE
SHW SHERWIN-WILLIAMS
FISV FISERV
MAR MARRIOTT INTL
KDP KEURIG DR PEPPER
Examples of Top Quintile Quality firms
continuing to improve CFROI. Largest
names shown. See full list in HOLT Lens.

18
Quality stocks have been resilient during the recent market drawdown.
Quality Defensives have provided the most insulation while Quality
Growth stocks underperformed.
Source: Credit Suisse HOLT, Bloomberg. Data Date: 3/14/2022. Universe = USA Top 1000.
US Top 1000
-18.3
Quality Growth
-24.2
Quality Defensive
-8.5
Q1 Quality
-13.6
-30
-25
-20
-15
-10
-5
0
5 Max Drawdown
US Top 1000
Quality Growth
Quality Defensive
Q1 Quality

-4
-3
-2
-1
0
1
2
1991 1994 1997 2000 2003 2006 2009 2012 2015 2018 2021
Quality Defensives Market Implied Yield (MIY),
Spread vs Quality Growth
-4
-3
-2
-1
0
1
2
1991 1994 1997 2000 2003 2006 2009 2012 2015 2018 2021
Quality Defensives Market Implied Yield (MIY),
Spread vs Market
0
1
2
3
4
5
6
7
8
1991 1994 1997 2000 2003 2006 2009 2012 2015 2018 2021
Quality Defensives Median Market Implied Yield
(MIY)
19
Quality Defensives are expensive in absolute terms, relative the U.S.
market, and relative to Quality Growth names.
Source: Credit Suisse HOLT, Data Date: 3/14/2022. Universe: Top 1000 US Companies by ttm market cap.
Current = 1.6, 6%ile Current = -1.7, 11%ile
Current = -1.1, 17%ile
Examples of firms that have been classified as Quality
Defensives over the last year and seen Market
Implied Yields decline in absolute terms:
Ticker Name
ICE INTERCONTINENTAL EXCHANGE
SJM JM SMUCKER
COST COSTCO WHOLESALE
HRL HORMEL FOODS
HSY HERSHEY
KO COCA-COLA
KMB KIMBERLY-CLARK
AJG ARTHUR J GALLAGHER
PG PROCTER & GAMBLE
GIS GENERAL MILLS

20
Illustrating the widening valuation tradeoff between Quality Growth
(left) and Quality Defensives (right).
Source: Credit Suisse HOLT Lens, Data Date: 3/14/2022.
Top 20 by market cap shown, see full list and screening
criteria in HOLT Lens.
Top 20 by market cap shown, see full list and screening
criteria in HOLT Lens.
Reasonably Priced Quality Growth Ideas: Expensive Quality Defensive Ideas:
Name Symbol MktCap
WALMART INC WMT 387.4
PROCTER & GAMBLE CO PG 356.6
COCA-COLA CO KO 255.0
COSTCO WHOLESALE CORP COST 233.1
PEPSICO INC PEP 217.7
DANAHER CORP DHR 189.4
MEDTRONIC PLC MDT 139.1
AMERICAN TOWER CORP AMT 106.1
ZOETIS INC ZTS 89.6
CME GROUP INC CME 82.4
BECTON DICKINSON & CO BDX 75.4
CROWN CASTLE INTL CORP CCI 75.2
INTERCONTINENTAL EXCHANGE ICE 72.3
GENERAL DYNAMICS CORP GD 65.7
COLGATE-PALMOLIVE CO CL 63.5
WASTE MANAGEMENT INC WM 62.4
HERSHEY CO HSY 42.2
KIMBERLY-CLARK CORP KMB 41.6
BAXTER INTERNATIONAL INC BAX 40.0
GENERAL MILLS INC GIS 38.7
Name Symbol MktCap
MICROSOFT CORP MSFT 2100.5
ALPHABET INC GOOGL 1719.8
VISA INC V 416.2
ACCENTURE PLC ACN 196.9
BLACKSTONE GROUP INC BX 137.9
S&P GLOBAL INC SPGI 137.9
INTUIT INC INTU 120.0
DEERE & CO DE 120.0
ANALOG DEVICES ADI 77.5
AON PLC AON 65.4
ACTIVISION BLIZZARD INC ATVI 62.6
BOSTON SCIENTIFIC CORP BSX 59.4
MOODY'S CORP MCO 56.6
KLA CORP KLAC 48.8
LULULEMON ATHLETICA INC LULU 37.7
GLOBAL PAYMENTS INC GPN 36.2
OLD DOMINION FREIGHT ODFL 35.2
CBRE GROUP INC CBRE 29.4
AMETEK INC AME 29.3
COPART INC CPRT 27.4

21
To illustrate, implied sales growth for many Quality Growth and Quality
Defensive stocks appear similar...
Source: Credit Suisse HOLT, Data Date: 3/11/2022.
Implied Growth = 10 Year Sales Growth CAGR Implied by Current Stock Price.
Calculated in HOLT Lens using a 10-year forecast assuming flat asset turns, IBES margins through 2024 and then held flat, and solve for current price (0% upside).
Name Symbol MktCap
Implied
Growth
MICROSOFT CORP MSFT $ 2,100.5 8.0%
ALPHABET INC GOOGL $ 1,719.8 6.0%
VISA INC V $ 416.2 8.0%
ACCENTURE PLC ACN $ 196.9 8.5%
S&P GLOBAL INC SPGI $ 137.9 7.5%
INTUIT INC INTU $ 120.0 10.0%
BOSTON SCIENTIFIC CORP BSX $ 59.4 6.0%
KLA CORP KLAC $ 48.8 5.0%
GENERAC HOLDINGS INC GNRC $ 18.0 9.0%
POOL CORP POOL $ 17.8 9.0%
US Quality Growth Examples US Quality Defensive Examples
Name Symbol MktCap
Implied
Growth
PROCTER & GAMBLE CO PG $ 356.6 7.0%
COCA-COLA CO KO $ 255.0 8.0%
COSTCO WHOLESALE CORP COST $ 233.1 10.0%
PEPSICO INC PEP $ 217.7 6.0%
DANAHER CORP DHR $ 189.4 7.0%
ZOETIS INC ZTS $ 89.6 9.0%
CROWN CASTLE INTL CORP CCI $ 75.2 9.0%
INTERCONTINENTAL EXCHANGE ICE $ 72.3 8.5%
COLGATE-PALMOLIVE CO CL $ 63.5 6.0%
WASTE MANAGEMENT INC WM $ 62.4 8.0%

22
…but the Quality Growth names have been improving CFROI and have
delivered higher and more consistent growth.
Source: Credit Suisse HOLT Lens, Data Date: 3/14/2022. Static universe used based on screens from page 20.
Reasonably Priced Quality Growth, Median Weighted Expensive Quality Defensive, Median Weighted
CFROI (%)
Asset Growth (%)
CFROI (%)
Asset Growth (%)

23
Stock Selection Within Value

Feb-00, -55%
Feb-10, 48%
Sep-20, -37%
Feb-22, 35%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
24
Value stocks recently outperformed Growth by the most since 2001…
Universe defined as Top 1000 US Companies by ttm market cap.
High Growth = Highest quintile using Region relative Factor Percentiles.
Cheap Systematic Value = Cheapest quintile using Region relative Factor Percentiles.
Rolling 12-Month Long/Short Return: Cheap Value vs High Growth
Feb-01, 121%

0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
25
...but, Value stocks still trade at a significant discount to Growth.
Ratio of Median HOLT Price to Book: Cheap Value vs High Growth
Current:
Cheap Value: 1.3x
High Growth: 7.4x
Dec 2020:
Cheap Value: 1.1x
High Growth: 9.7x
Feb 2000:
Cheap Value: 1.0x
High Growth: 12.0x
Sept 2002:
Cheap Value: 0.9x
High Growth: 2.9x
Universe defined as Top 1000 US Companies by ttm market cap.
High Growth = Highest quintile using Region relative Factor Percentiles. Long-term median HOLT P/B = 3.8x.
Cheap Systematic Value = Cheapest quintile using Region relative Factor Percentiles. Long-term median HOLT P/B = 1.1x.

-4
-3
-2
-1
0
1
2
3
4
5
6
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Segment Median Market Implied Yield (MIY) Spread vs Market
Stable Yield Banks & Insurance Cyclical Value
26
Within Value, Cyclical Value implied yields have recently exceeded
Banks & Insurance for the first time since mid-2018.
Source: Credit Suisse HOLT, Data Date: 3/14/2022. Universe: Top 1000 US companies by TTM market cap. Market Implied Yields for Financial firms on the
HOLT CFROE model are trimmed by 150 bps throughout this analysis to preserve comparability.

27
Universe Top 1000 US Companies by ttm market cap.
Revisions breadth calculated as the % of companies with positive revisions over the trailing 13-weeks divided by the number of companies with non-zero revisions over the same period.
Forecasted levels of Profitability for Cyclical Value stocks are near
decade highs.
U.S. Cyclical Value Stocks
0
1
2
3
4
5
6
7
8
9
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Median Forecasted CFROI (next 12-months)

28
Source: Credit Suisse HOLT, the BLOOMBERG PROFESSIONAL™ service. Data Date: 3/9/2022.
Universe defined as Cyclical Value stocks within largest 1000 US Companies based on ttm market cap.
However, there are reasons for skepticism. Slowing global economic
growth is typically a challenging backdrop for Cyclical Value.
Revisions are already slowing.
30
35
40
45
50
55
60
65
70
-0.4
-0.3
-0.2
-0.1
0
0.1
0.2
0.3
0.4
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Rolling 1-Year Excess Return of Cyclical Value vs
US Manufacturing PMI’s
Rolling 1-Year Return NAPMPMI
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Cyclical Value,
13-Wk CFROI Revisions Breadth (% Positive)

29
In December, we screened for attractive Cyclical Value ideas and noted
ROIC was increasingly being used in CEO incentives.
Our December U.S. Market Overview (p.24) highlighted 26 names that
were representative of the opportunity in Cyclical Value.
The screen identified cheaper names within Cyclical Value but avoided the
most financially distressed firms. We noted the increased adoption of
ROIC as incentives for CEOs within the subset.
The screen performed well during the recent period of strength for the
Cyclical Value segment. Strong performance came almost exclusively from
resource-related names.
Source: Credit Suisse HOLT, the BLOOMBERG PROFESSIONAL™ service, Screen Data Date: 12/13/2021.
35%
42%
69% 70%
78%
65%
58%
31% 30%
22%
LFY -4 LFY -3 LFY -2 LFY -1 LFY
% of Screen Companies with a ROIC CEO Incentive
No Yes
Name Symbol
Total Return
12/15 - 3/14
HALLIBURTON HAL 64%
MOSAIC MOS 60%
MARATHON OIL MRO 47%
CHEVRON CVX 46%
ALCOA AA 44%
EOG RESOURCES EOG 39%
CONOCOPHILLIPS COP 38%
EXXON MOBIL XOM 35%
PIONEER NATURAL PXD 34%
VALERO ENERGY VLO 34%
DEVON ENERGY DVN 34%
CONTINENTAL RESOURCES CLR 32%
HESS HES 25%
MARATHON PETROLEUM MPC 24%
DIAMONDBACK ENERGY FANG 22%
HUNTSMAN HUN 22%
VIACOMCBS PARA 22%
FREEPORT-MCMORAN FCX 20%
DOW DOW 13%
PHILLIPS 66 PSX 12%
WESTROCK WRK 5%
DXC TECHNOLOGY DXC -1%
WESTERN DIGITAL WDC -21%
FORD MOTOR F -22%
VIATRIS VTRS -22%
GENERAL MOTORS CO GM -30%
Total Return
12/15 - 3/14
Screen Average 22%
Screen Energy, Chemicals & Mining Average 34%
Cyclical Value (All) 2%
Screen Non-Energy Average -10%
USA Top 1000 Universe -13%

30
The Energy sector illustrates this dynamic. The sector has a history of
value destruction, though over the last decade growth has been more
disciplined.
US Aggregate Energy Sector
Source: Credit Suisse HOLT Lens, 3/14/2022. Analyze the aggregate U.S. Energy sector in HOLT Lens.
HOLT P/B, Energy Sector % of Aggregate U.S. Market
The U.S. Energy sector has not earned its cost
of capital since 2008, though forecasts have
improved recently.
Weak profitability eventually resulted in a
substantially lower asset growth rate for the
sector over the last few years.
Over the last 30 years, the Energy sector has
traded at a HOLT P/B of about 70% that of
the U.S. market, currently its about 50%.
Asset Growth
CFROI

31
The sector is not getting the improved valuations that are warranted
based on current oil prices.
*Based on CL12 price of $84.5 and linear relationships drawn with monthly data from 2010-2022. See Appendix for details.
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
20
40
60
80
100
120
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Aggregate U.S. Energy HOLT P/B Relative to the Market
WTI 12 Month Price, lhs US Energy HOLT P/B Relative to Market, rhs
Forecasted profitability for the U.S.
Energy sector has improved alongside
higher oil prices.
However, since 2020 the sector has
traded at wide discount to the market,
even as oil prices have increased.
The sector currently trades at a HOLT
P/B that is 50% of the aggregate U.S.
market, versus a P/B of 67% of the
market that is warranted by oil prices
0
1
2
3
4
5
6
7
0
20
40
60
80
100
120
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Aggregate U.S. Energy Forecasted CFROI
Energy Forecast CFROI, rhs WTI 12 Month Price, lhs
Implied by oil prices*
Implied by oil prices*

32
Click here to view US Energy Aggregate in HOLT Lens
Energy CEOs are increasingly being incentivized to focus on return on
capital, which could help drive more sustainable CFROIs.
Source: Credit Suisse HOLT, Data Date: 3/11/2022. Relative Wealth Chart of the US all-cap Energy Aggregate (weighted scenario).
US Energy Companies (3Bn+) with a Return on Capital CEO Incentive
Name Ticker MktCap FY-4 FY-3 FY-2 FY-1 LFY
EXXON MOBIL CORP XOM $ 361.8 Yes Yes Yes Yes Yes
CHEVRON CORP CVX $ 330.4 Yes Yes Yes Yes Yes
CONOCOPHILLIPS COP $ 129.9 Yes Yes Yes Yes Yes
SCHLUMBERGER LTD SLB $ 60.9 Yes Yes Yes Yes Yes
PHILLIPS 66 PSX $ 35.6 Yes Yes Yes Yes Yes
HALLIBURTON CO HAL $ 34.0 Yes Yes Yes Yes Yes
HESS CORP HES $ 30.4 Yes Yes Yes Yes Yes
ONEOK INC OKE $ 30.1 Yes Yes Yes Yes Yes
HOLLYFRONTIER CORP HFC $ 5.8 Yes Yes Yes Yes Yes
HELMERICH & PAYNE HP $ 4.6 Yes Yes Yes Yes Yes
EOG RESOURCES INC EOG $ 70.0 No Yes Yes Yes Yes
OCCIDENTAL PETROLEUM CORP OXY $ 54.3 No Yes Yes Yes Yes
ANTERO RESOURCES CORP AR $ 7.1 No Yes Yes Yes Yes
RANGE RESOURCES CORP RRC $ 7.0 No Yes Yes Yes Yes
CHAMPIONX CORPORATION CHX $ 5.2 NA Yes Yes Yes Yes
TECHNIPFMC PLC FTI $ 3.5 NA Yes Yes Yes Yes
BAKER HUGHES COMPANY BKR $ 38.0 Yes No Yes Yes Yes
PIONEER NATURAL RESOURCES PXD $ 58.0 No No Yes Yes Yes
DEVON ENERGY CORP DVN $ 41.0 No No Yes Yes Yes
WILLIAMS COS INC WMB $ 39.4 No No Yes Yes Yes
DIAMONDBACK ENERGY INC FANG $ 24.3 No No Yes Yes Yes
CONTINENTAL RESOURCES INC CLR $ 21.8 No No Yes Yes Yes
MARATHON OIL CORP MRO $ 18.8 No No Yes Yes Yes
COTERRA ENERGY INC CTRA $ 10.5 No No Yes Yes Yes
MURPHY OIL CORP MUR $ 5.7 No No Yes Yes Yes
SOUTHWESTERN ENERGY CO SWN $ 3.9 No No No Yes Yes
VALERO ENERGY CORP VLO $ 36.6 No No No No Yes
PDC ENERGY INC PDCE $ 7.0 No No No No Yes
CACTUS INC WHD $ 4.5 No No No No Yes

33
Stock selection within Cyclical Value
Name Symbol
Mkt Cap
($B)
EXXON MOBIL XOM 360
CHEVRON CVX 331
CONOCOPHILLIPS COP 128
FREEPORT-MCMORAN FCX 69
EOG RESOURCES EOG 68
PIONEER NATURAL PXD 57
DOW DOW 45
DEVON ENERGY DVN 40
DUPONT DE NEMOURS DD 38
VALERO ENERGY VLO 37
PHILLIPS 66 PSX 35
MOSAIC MOS 23
DIAMONDBACK ENERGY FANG 23
CONTINENTAL RESOURCES CLR 21
MARATHON OIL MRO 18
CELANESE CE 15
ALCOA AA 15
EASTMAN CHEMICAL EMN 14
SNAP-ON SNA 11
COTERRA ENERGY CTRA 10
AGCO AGCO 10
OWENS CORNING OC 9
ITT ITT 7
REGAL REXNORD RRX 6
MANPOWER MAN 5
Name Symbol
Mkt Cap
($B)
PARAMOUNT GLOBAL PARA 21
DISH NETWORK DISH 16
BATH & BODY WORKS BBWI 12
CLEVELAND-CLIFFS CLF 12
VIATRIS VTRS 12
UNITED AIRLINES UAL 11
TENET HEALTHCARE THC 10
AMERICAN AIRLINES AAL 9
PLAINS ALL AMER PIPELNE PAA 8
KOHL'S KSS 8
EQT EQT 8
DXC TECHNOLOGY DXC 8
NEXSTAR MEDIA NXST 7
PENN NATIONAL GAMING PENN 7
GAMESTOP GME 6
ADT ADT 6
SUNRUN RUN 6
GAP GPS 5
PVH PVH 5
ALTICE USA ATUS 5
Favor industrial economy Cyclical Value names
with ROIC incentives, reasonable valuations, and
lower probability of defaults.
Avoid names with higher probability of default
readings without ROIC incentives.
See full list and criteria in HOLT Lens See full list and criteria in HOLT Lens

Summary
34
Hyper Growth stocks – Not yet time to reengage with the segment.
• Though implied yields have narrowed versus the market as the group has underperformed, the segment remains expensive
relative to history.
• Hyper Growth stocks have reverted to the high beta profile that is more consistent with its history.
• The top-line growth advantage Hyper Growth stocks enjoyed relative to the market has normalized and revisions are weak.
High Quality stocks remain attractive – favor Quality Growth over Quality Defensives going forward.
• Quality Defensives have offered relative protection during the recent market weakness, but are very expensive versus history.
• Quality Growth names offer durable competitive advantages at more reasonable valuations.
Continue to favor Cyclical Value stocks as the most appealing way to get exposure to Value.
• Cyclical Value implied yields are high versus the market and other Value segments.
• Profitability forecasts for Cyclical Value stocks have substantially improved and might have limited scope for upside, but select
names have scope to re-rate if the firms demonstrate a credible focus on capital discipline and return on capital.
• Cyclical Value stocks from the Energy, Materials, and Industrials sectors with ROIC based CEO incentives offer appeal.

36
U.S. Energy Sector cash flow forecasts are likely to start substantially
exceeding growth expenditures and debt levels have been stable
Source: Credit Suisse HOLT, 3/9/2022.
US Aggregate Energy Sector
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
91
93
95
97
99
01
03
05
07
09
11
13
15
17
19
21
Gross Cash Flow vs. Reinvestment ($mm)
Rental Expense R&D Expense
Exploration Expense Capex
Gross Cash Flow
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
91
93
95
97
99
01
03
05
07
09
11
13
15
17
19
21
HOLT Debt ($mm)

37
Improved valuations are warranted based on current oil prices.
Based on CL12 price of $84.5 and linear relationships drawn with monthly data from 2010-2022.
0
1
2
3
4
5
6
7
8
0
20
40
60
80
100
120
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Energy Forecast CFROI WTI 12 Month Price, lhs
4.78
y = 0.0776x - 1.5754
R² = 0.8803
0
1
2
3
4
5
6
7
8
20 30 40 50 60 70 80 90 100 110 120
US
Energy
Forecast
CFROI
WTI 12 Month Price
Aggregate, 2010 - 2022
Current
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
20
40
60
80
100
120
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
WTI 12 Month Price, lhs
US Energy HOLT P/B Relative to Market, rhs
48%
y = 0.0054x + 0.2083
R² = 0.6491
20%
30%
40%
50%
60%
70%
80%
90%
100%
20 30 40 50 60 70 80 90 100 110 120
US
Energy
HOLT
P/
B
Relative
to
Market
WTI 12 Month Price
Aggregate, 2010 - 2022
Forecasted profitability for the U.S. Energy sector has improved alongside
higher oil prices…
However, since 2020 the sector has traded at an increasingly wide discount
to the market relative as oil prices have increased.
The sector currently trades at a HOLT P/B that is 50% of the aggregate U.S.
market, versus a P/B of 67% of the market that is warranted by oil prices.
2020-2022
2020-2022
Current
…though forecasted CFROI remains below forecasts from 2010-2013.

38
For investors that are concerned about higher treasury yields, over
the long term Quality Growers tend to be less sensitive to rates than
Quality Defensives.
Source: Credit Suisse HOLT, Bloomberg. Data Date: 3/14/2022.
-35%
-20%
-31%
-16%
-38%
0%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
Hyper Growth Banks & Insurance Cyclical Value Quality Defensive Quality Growth Stable Yield
Correlation of Segment Excess Returns to Changes in 10-Yr Treasury Yields
15 Yrs 5 Yrs 3 Months

-8
-6
-4
-2
0
2
4
6
8
10
12
14
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
Median HOLT Market Implied Yield (MIY)
Q1 Q2 Q3 Q4 Q5
-12
-10
-8
-6
-4
-2
0
2
4
6
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
Median HOLT Market Implied Yield (MIY)
Spread to Universe Median
Q1 Q2 Q3 Q4 Q5
39
Universe: Largest 1000 US companies by TTM market cap, Source: Credit Suisse HOLT. Date range: January 1991 – March 2022.
Wide value spreads remain across the U.S. Large/Mid Cap universe.

24% 23%
18%
10%
8%
-11%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Valuation Low Volatility Overall Quality Momentum Growth
Last 12 Months: Q1 Factor vs. Equal Wt Universe
13%
9%
7%
3%
2%
-11%
-15%
-10%
-5%
0%
5%
10%
15%
Valuation Low Volatility Overall Momentum Quality Growth
Year to Date: Q1 Factor vs. Equal Wt Universe
28%
20%
17%
10%
7%
-22%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Valuation Overall Low Volatility Momentum Quality Growth
Year to Date: Q1-Q5 Returns
48% 46%
43%
29%
23%
-27%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
Low Volatility Overall Momentum Quality Valuation Growth
Last 12 Months: Q1 – Q5 Returns
40
Long-Short (top) and long only (bottom) factor performance.
Overall Scorecard Score = 33% Quality + 33% Momentum + 33% Valuation. For more on the HOLT Scorecard see HOLT Scorecard & Factor Library Primer

-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
1998 2001 2004 2007 2010 2013 2016 2019 2022
Quality Correlation to Market Implied Yield (MIY)
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
1998 2001 2004 2007 2010 2013 2016 2019 2022
Quality Correlation to 13-Wk CFROI Revisions
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
1998 2001 2004 2007 2010 2013 2016 2019 2022
Growth Correlation to Market Implied Yield
(MIY)
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
1998 2001 2004 2007 2010 2013 2016 2019 2022
Growth Correlatin to 13-Wk CFROI Revisions
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
1998 2001 2004 2007 2010 2013 2016 2019 2022
Growth Correlatin to Low Volatility
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
1998 2001 2004 2007 2010 2013 2016 2019 2022
Quality Correlation to Low Volatility
41
Relative to recent history, a Quality bias currently tilts investors toward
higher implied yields and lower volatility profiles.
Source: Credit Suisse HOLT, Universe = USA Top 1000. 2/28/2022. Rank correlations of factor exposures.
Expensive Higher Vol/Beta
Weaker Revisions
Cheap Lower Vol/Beta
Stronger Revisions
Cheap Lower Vol/Beta
Stronger Revisions
Expensive Higher Vol/Beta
Weaker Revisions

Hyper Growth
High Growth, Low Quality,
High HOLT P/B
Quality Growth
High Quality and Growth, High HOLT
P/B and some Risk
Quality Defensives
Lowest Risk, High Quality, High HOLT
P/B
Stable Yield
Low Risk, Low Quality, High Income
Cyclical Value
High Risk, Low HOLT P/B, Low Growth
Banks & Insurance
In 2020, we introduced a new way to classify stocks based on common
combinations of fundamental attributes to better understand risk and
returns.
42
Value
Income Risk
Quality
Growth
Attributes
JPM
BAC
WFC
MS
C
CVX
XOM
MU
GE
GM
NOW
CRM TSLA
SQ
VZ
NEE DUK
PSA
MCD
KO
DHR
UNH
PG
AMZN
V
GOOG
PYPL
FB
Source: Credit Suisse HOLT, Data Date: 9/14/2021. Companies listed are for illustrative purposes only.
For more on HOLT Factors: Scorecard and Factor Library Primer .
Click to see criteria in HOLT LensTM
SHOP

43
Screening Criteria for Market Segments
Quality Growth
• Operational Quality Peer Rank > 50
• Growth Peer Rank > 50
• HOLT Price / Book Peer Rank < 50
• Low Volatility Peer Rank < 80
• Excludes Utilities, REITs, Banks & Insurance
Quality Defensives
• Low Volatility Peer Rank > 80
• Operational Quality Peer Rank > 50
Hyper Growth
• Operational Quality Peer Rank < 50
• Growth Peer Rank > 50
Stable Yield
• Low Volatility Peer Rank > 80
• Operational Quality Peer Rank < 50
• Dividend Yield Peer Rank > 50
• Excludes Banks & Insurance
Cyclical Value
• HOLT Price / Book Peer Rank > 50
• Growth Peer Rank < 50
Banks & Insurance
• Sector = Banks or Insurance
Source: Credit Suisse HOLT.

44
The US Market Implied Yield (MIY) is very low in absolute terms and
relative to history.
2.9%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
HOLT Market Implied Yield
US Market Aggregate excluding Financials

45
Deriving a Cost of Equity and Equity Risk Premium
Model Inputs and Assumptions
Calculation Details
Market Implied Yield (WACC) 2.94% Corporate Yield 3.23%
Leverage 20.1% Government Yield (10Yr) 1.97%
Credit Spread 1.24% Long Term Inflation Expectations 1.90%
WACC = W% Equity * Real Cost of Equity + W% Debt * Real Cost of Debt
2.94% = 79.9% * Solve + 20.1% * Real Risk Free + Credit Spread
2.94% = 79.9% * Solve + 20.1% * 0.06% + 1.24%
2.94% = 79.9% * Solve + 20.1% * 1.30%
2.94% = 79.9% * 3.36% + 20.1% * 1.30%
Market Cost of Equity (Blend with Financials)
3.59%
Market Equity Risk Premium (COE - Risk Free)
3.52%
Nominal Cost of Equity (COE + Inflation)
5.49%

0.1%
-2%
0%
2%
4%
6%
8%
10%
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
Real Risk Free Rate
3.52%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
US Market Equity Risk Premium
1.2%
0%
1%
2%
3%
4%
5%
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
Credit Spread
46
The decline in the discount rate has primarily been driven by ultra-low
risk free rates.
The Equity Risk Premium, at 3.52% versus a long-term median of 3.4%, remains reasonable and is a sharp
contrast to the negative ERP observed in the early 2000’s.
Long-term Median: 2.2% Long-term Median: 3.4% Long-term Median: 1.0%

47
US Aggregate Market Implied Equity Risk Premium
Long-term Median: 3.4%
3.52%
-2%
0%
2%
4%
6%
8%
10%

3.59%
-2%
0%
2%
4%
6%
8%
10%
48
US Aggregate Real Cost of Equity
Long-term Median: 6.0%

Disclosure Appendix
Analyst Certification
HOLT Specialist: David Rones, HOLT Specialist: Sean Burns, HOLT Specialist: Richard Curry, HOLT Specialist: Joseph Pecora and HOLT Specialist:
Vishal Bondre each certify, with respect to the companies or securities that the individual analyzes, that (1) the views expressed in this report accurately
reflect his or her personal views about all of the subject companies and securities and (2) no part of his or her compensation was, is or will be directly or
indirectly related to the specific recommendations or views expressed in this report.
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The HOLT methodology does not assign ratings or a target price to a security. It is an analytical tool that involves use of a set of proprietary quantitative
algorithms and warranted value calculations, collectively called the HOLT valuation model, that are consistently applied to all the companies included in
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the underlying economics of firm performance. These adjustments provide consistency when analyzing a single company across time, or analyzing
multiple companies across industries or national borders.
The default scenario that is produced by the HOLT valuation model establishes a warranted price that represents the expected mean value for a
security based upon empirically derived fade algorithms that forecast a firms future return on capital and growth rates over an extended period of time.
As the third-party data are updated, the warranted price updates automatically. A company’s future achieved return on capital or growth rate may differ
from HOLT default forecast. Additional information about the HOLT methodology is available upon request.
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