XOP - Value Investors Take Note! Why Chevron May Be A Must-Own Stock
2024-01-29 09:10:56 ET
Summary
- Value investments have significantly underperformed, with the relative valuation of value to growth stocks at a 20-year low.
- Growth stocks have been driven by the belief that the Fed has won the fight against inflation, but inflation remains a concern.
- Energy stocks, including Chevron Corporation, are the cheapest sector in an overvalued market and could benefit from a potential rotation to value stocks.
A Lengthy Introduction About Value & Energy
If there's one thing I've discussed repeatedly with my friends and colleagues in the investment world, it's that the past few months have started to feel like 2020/2021 again.
Don't get me wrong, I'm not complaining about this market (I have no shorts).
We're just witnessing some remarkable developments, including the significant underperformance of "value" investments.
As we can see below, the relative valuation of value to growth stocks ended 2023 close to a 20-year low....
Value Investors Take Note! Why Chevron May Be A Must-Own Stock