A Cogent Case For Value: An Interview with Sam Peters
Higher interest rates and greater fiscal spending is good for value but is being largely ignored due to the focus on a soft landing.
This new market cycle of higher interest rates and greater fiscal spending is unequivocally good for value but is being largely ignored due to the focus on AI and an economic soft landing.
We believe the market’s attention on large growth stocks has created an attractive value menu, particularly in energy, insurance and IT hardware manufacturers.
The relative value of value versus growth is back to all-time highs, suggesting value stocks will have an edge over the cycle and making an investment case for a healthy value allocation.
Value Can Defuse Concentration Risk
The value of value relative to growth is back to historic highs, being driven by the extreme concentration of the top seven stocks in the S&P 500 Index. The combination of expanding equity multiples and higher interest rates in 2023 has overshadowed growing risks and created an environment reminiscent of 1987’s “Black Monday”. Value provides investors strong advantages in the face of these growing extremes, offering the potential for downside protection against market declines as well as compelling relative return potential on a decrease in market concentration.
Still Far to Go in New Value Cycle
- We are in the early stages of a new market cycle characterized by higher volatility, inflation and interest rates and
creating conditions where value stocks thrive.
- New market cycles are characterized by future leaders beginning extremely cheap, and valuation spreads remain at historic highs despite two years of strong performance.
- As investors recognize there is no return to the pre-COVID growth cycle, value stocks will shift toward historically normalized levels, creating compelling opportunities for investors.
The Value of Value is Still Compelling
Market cycle arcs persist until completed, and there is still a long way to go in favor of value.
It’s Infrastructure’s Time to Shine. Here’s What Investors Should Know About the Asset Class.
As the U.S. CPI data continues to rise, Charles Hamieh, Portfolio Manager at ClearBridge Investments, dives into the opportunity present for investors looking at the infrastructure space as an inflation hedge moving forward.
SEC “Risk Alert” A Good Step Toward Improving ESG Standards
The recent focus of the U.S. Securities and Exchange Commission (SEC) on better quality, more comprehensive reporting on environmental, social and corporate governance (ESG) standards is a welcome development, particularly as investor interest in ESG products continues to grow rapidly.
Disruptive Companies Thriving in the Time of COVID
Although many companies in consumer-oriented industries continue to struggle, others have benefitted from society’s need to socially distance. Discussed here are five stocks that have successfully accelerated digital adoption through the pandemic along with three in hard-hit categories poised to thrive once coronavirus inoculations become widespread.
What’s Good for the Chinese Consumer Is Good for Investors
The so-called “Trade War” between the United States and China has US investors scrambling for a new answer, and it may just lie in China’s consumer-friendly, high-growth opportunity market. But is there enough upside to make the volatile risk more worthwhile?