2024-07-25 05:00:00 ET
Summary
- S&P 500 value stocks have rarely been cheaper relative to growth stocks; the S&P 500 Value Index forward P/E is at a 40%+ discount to the Growth Index.
- A Big Tech pullback prompted by a global semiconductor sell-off on July 17th may be fueling a rotation from tech to value-focused stocks.
- Investors should be wary of falling into “value traps” by focusing on a limited number of metrics; some stocks are cheap for a reason and lack strong fundamentals.
- The stocks suggested in this article are collectively strong on value, growth, profitability, momentum, and analyst EPS revisions.
- SA’s Quant Model identified five Strong Buy value stocks up by an average of ~50% in the past year, with solid investment fundamentals and growth potential.
Rotation Out of Tech?
Tech and AI-fueled growth stocks have crushed value stocks in the past year. In recent trading, tech giants like the Magnificent Seven that have dominated the markets have experienced a pullback. A global semiconductor sell-off caused the Nasdaq to sink to its worst intraday session since September 2022, signaling a potential rotation out of tech. As a result, value stocks have seldom looked more attractive relative to growth stocks, as measured by the ever-widening forward price-to-earnings chasm in the S&P 500. In fact, over the last 23 years, value has rarely traded at this level of discount to growth....
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For further details see:
Top 5 Value Stocks For A Big Tech Pullback (SA Quant)