| On the flip side, top value stocks are doing just fine, thank you very much. Chevron (NYSE: CVX) hit a new all-time high after earnings nearly doubled in the third quarter. Year to date, profits are up 175%, yet it's trading at just 11 times expected full-year earnings. Merck & Co. (NYSE: MRK) is also trading at an all-time high after it reported a 14% increase in sales in the third quarter. Despite the record high stock price, it trades at just 13.5 times the full year's projected earnings. And last week, Caterpillar (NYSE: CAT) jumped the most it had in two years on strong earnings. Caterpillar is trading at just 15 times 2022's forecast earnings, or just a hair above one times growth. There are myriad examples of value stocks acting strongly with solid fundamentals behind them - including growing cash flow - while tech stocks and other previous growth darlings are getting the spit kicked out of them. The cycles in which either value or growth outperform the other typically last several years. I don't expect this time to be any different. Value should perform better than growth for at least a few more years. If you want your portfolio to grow, find some quality value stocks that are still cheap and whose underlying companies are growing their businesses and paying dividends to generate some income for you. With prices on everything rising every day, there's no reason to pay too much for your stocks, especially when there are so many quality ones on sale. Good investing, Marc |
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