Are Value Stocks Poised for a Comeback?

Dear Reader,

Value stocks or stocks with low Price/Earnings, Price/Book and Price/Sales ratios are outperforming by significant margin growth stocks  since the beginning of 2021 for the first time since 2002-2003 after the bursting of the Dot-Com bubble.

Are value stocks set to outperform more? Yes, I think in the next two or three years value stocks, which in today's market are energy, financials, industrials and commodity producers, should outperform growth stocks, which nowadays are technology stocks.

However, I believe the general market will start going up markedly again bringing along technology stocks. Simply because technology companies through the use of algorithms help firms and people save on money, effort and time, which is a characteristic of a best selling product.

I particularly think energy producers like Marathon Oil Corporation and Petroleo Brasileiro are still undervalued. Regional banks, in the USA especially, are also set to outperform driven by the rising rates environment and their high dividend yields. Automobile manufacturers are also a good proposition with their steady positive cash flows which turn into healthy dividends.

Industrials are also set to rise significantly driven by higher infrastructure spending, in the US especially.

Once the hottest technology stocks that have risen most fall by 30 % to 40 % from their recent peaks, I think many of them will rise in price significantly. I think Twitter and up and coming social networks like Pinterest and Snap, Snapchat application's owner, could soon become undervalued.

All that said, I still think we are in a general stock market bubble driven by central banks creating monetary reserves by printing money and indirectly subsidizing current and future large government spending.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich