Many of the stocks best positioned to ride out an economic downturn look overbought, according to quantitative strategists at Sanford C. Bernstein & Co.

Equities that score highly on quality factors such as return on equity are trading at all-time highs on the basis of forward earnings or book value, analysts including Sarah McCarthy wrote in a research note dated April 15.

“With a U.S. recession widely expected at some point over the next 12-18 months and very little earnings growth forecast in Europe, many wish to be positioned in ‘quality,”’ the note said. “However, the valuations seem prohibitive.”

Quants tend to filter listed firms on the basis of factors such as quality, value or momentum, with the aim of beating the wider market. A variant of the MSCI World Index targeting quality stocks is up 18 percent so far this year, compared to 15 percent for the broader index.

“While there is strong evidence that ROE performs well in a slowdown and recession, with these all-time high valuations we prefer to cast a wider net and look for quality elsewhere,” the strategists said.

The analysts said they prefer European stocks that manage their tax liabilities conservatively, report a lower proportion of accruals, and boast below-average volatility in earnings estimates. Equities with low leverage globally are also favored, the note said.