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Barron's: A New Dawn For Value Stocks

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Barron's: A New Dawn For Value Stocks
  • The cover story in this weekend's Barron's makes a case for rebound in value stocks as growth stocks take a siesta.
  • Barron's offers 16 ways – from stocks to mutual funds – to play such a value rebound.
  • Other featured articles include a special report on strategic beta ETFs.

Growth stocks have fared far better than value stock over the past five years, points out this week's cover story in Barron's. But that is starting to change. In the past few months, growth stocks have grown too rich for many investors' liking and value stocks too cheap to ignore.

"Move Over, FANGs: Value Investing Is Rebounding" by Andrew Bary suggests that value investing could be on the verge of a multi-year comeback. That would be good news for the likes of Boeing Co (NYSE: BA), Citigroup Inc (NYSE: C) and Time Warner Inc (NYSE: TWX), but bad news for former high fliers like Amazon.com, Inc. (NASDAQ: AMZN), Netflix, Inc. (NASDAQ: NFLX) and Starbucks Corporation (NASDAQ: SBUX). The article offers 16 ways to play a rebound.

"Momentum stocks trade at an extreme premium to value stocks, with the valuation spread the highest since 1980, except for during the tech bubble," says one strategist quoted in the article. But, another says, "Investors are now questioning whether value-based strategies can ever work with central bankers' stranglehold on interest rates."

There are hundreds, if not thousands, of value plays in the market today, including individual stocks and mutual and exchange traded funds. Barron's focuses in particular on 12 stocks, two ETFs and two mutual funds worth a look now. Many of them have rich dividend yields as well as cheap shares. Sectors include financials, technology, pharmaceuticals and automobiles.

Barron's makes it clear that the comeback in value may require patience, as robust economic growth and higher interest rates are among key ingredients of a sustained period of strong relative performance for value stocks.

Related Link: Barron's Picks And Pans: Ingersoll-Rand, Michael Kors And More

Other Feature Stories

Check out the special report on ETFs to discover what investors really need to know before buying "smart beta." A roundtable of four experts discusses smart ways to invest in "strategic-beta" ETFs. Find out what the difference is between smart beta and strategic beta, when such strategies are appropriate, and how to avoid the pitfalls. The panelists discuss what they are doing now and they share several picks. The panelists include chief investment officers at two asset management firms, the founder of a financial advisory firm and a director at Morningstar.

See what Barron's feels are the prospects for Ingersoll-Rand PLC (NYSE: IR) despite the woes in energy, Michael Kors Holdings Ltd (NYSE: KORS) with its new products and international expansion, the Valvoline spinoff from Ashland Inc (NYSE: ASH), as well as Halyard Health Inc (NYSE: HYH) as it pursues acquisitions and expands its product lineup.

Disclosure: At the time of this writing, the author had no position in the mentioned equities.

Image Credit: Public Domain

 

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