Factors leading to growth outperformance do not appear sustainable. We believe the current environment is particularly well-suited to our absolute value investment process.
These days, the investment highway seems more treacherous than an L.A. freeway in a rainstorm. Defensive techniques aren’t just for driving. Value has become defensive again, just as it was in the aftermath of the late 1990s Tech Bubble.
This is the first in a series of memos in which we will address common questions from our clients about the Partners Strategy and Value investing. In this insight, we discuss why we believe the value opportunity in our Financial Services holdings is compelling in the current interest rate environment.
Poplar Forest’s portfolios are currently valued at one of the largest price-to-earnings discounts to the S&P 500 since we’ve been in business. In effect, the market is suggesting that the outlook for our companies is less attractive than it has ever been. We disagree. Our companies may be underdogs, but when we look out over the next 3-5 years, we believe that their fundamentals will more than beat the spread.
This is the first in a series of memos in which we will address common questions from our clients about the Partners Strategy and Value investing. In this insight, we discuss why we believe the value opportunity in our Financial Services holdings is compelling in the current interest rate environment.
With the economy getting back to normal more quickly than expected, the U.S. Federal Reserve will soon start the multi-year process of normalizing monetary policy. In the face of potentially rising interest rates, investor worries are growing: stocks look expensive, bond prices go down when yields rise, and cash earns nothing. But, there is a fourth option: value stocks.
In this edition of Analyst Insights, Cathy Lloyd updates us on how the pandemic has shaped the Technology, Communication Services, and Utilities sectors and what she’s looking for when evaluating investment opportunities.
With growth stocks having reasserted themselves as interest rates trended lower during the second quarter, some naysayers are already predicting the end of this value cycle. I couldn’t disagree more. For one, I continue to believe that bond yields have separated from reality due to price manipulation on behalf of central banks at home and abroad.
Value: Has Outperformance Only Just Begun? In this edition of Poplar Forest Insights, we discuss why now may be an opportune time to rebalance portfolios towards value strategies.
During these wild market swings, we’ve seen a marked change in the type of companies that investors favor. Former growth darlings are being sold to free up funds to purchase shares of economically-sensitive businesses. Investors want beneficiaries of economic reopening and reflation driven by vaccine deployment and continued fiscal and monetary stimulus. As a result, value stocks have begun to materially outperform growth stocks.
