Value Stocks Have Never Been Cheaper

Value investing has been a losing strategy in recent years, and value stocks are currently trading at the steepest discount in history. This according to a recent article in MarketWatch. “There’s never been a worse time in history to be a value investor,” the article says, citing a recent comment by JP Morgan’s chief U.S. equity strategist, Dubravko Lakos-Bujas that “the relative price-to-book spread of the cheapest vs. the most expensive portfolio is at 9… Read More

When Will Value Investing Outperform Growth?

The current market cycle is testing the patience of value investors, according to an article in Barron’s. “Although value managers haven’t lost money, they have watched growth managers steadily pedal away,” the article reports, citing Morningstar data showing that over the past decade large-cap growth funds have returned an average of 15.6% annually, versus 13.2% for large-cap value. Historically, the article notes, value investing has lagged growth for long periods but eventually outperformed. This market… Read More

Manager Says Stock Price Gap Signals Opportunity

The valuation dispersion occurring in the market is presenting the “opportunity of a decade,” according to a recent article in Bloomberg. The article reports that a portfolio manager at the Julius Baer Group says the historic spread between the most and least expensive stocks is presenting strong buy opportunities for investors. The article also quotes Kairos Pegasus Fund’s Federico Riggio, who argues that along with above-average earnings growth, the inexpensive segments of the equities market… Read More

Bernstein Sees Buy Signals for Value Stocks

For the “quantitative whizzes” at Sanford Bernstein, the chasm that exists between the valuations of the cheapest and most expensive stocks around the world—which has now reached levels “rarely seen in decades of history– is a bullish omen for value stocks.” This according to a recent Bloomberg article. “Add easier financial conditions with stronger economic sentiment in Europe and Asia, and the stage is set for a tentative rebound in the investing strategy over the… Read More

Hulbert: Value vs. Growth Valuation Spread Widest Since 2000

Earlier this month, price spread between value and growth stocks was the largest it has been since 2000, writes Mark Hulbert in a recent MarketWatch article. Hulbert offers data from Columbia University finance professor Kent Daniel showing that the average large-cap value stock’s price-book ratio is “barely half that of the average among large-cap growth stocks. Among small-cap stocks, value is even cheaper relative to growth.” The only time value has been relatively cheaper, according… Read More