Market Overview

Value Stocks Are Gaining Popularity Among Investors

Share:
Value Stocks Are Gaining Popularity Among Investors

Growth stocks have proven to be a superior investment versus value stocks since the start of 2017. But heading into the back half of the year the trend is now set to reverse, especially at a time when the growth tech trade has become overcrowded.

As an example, Micron Technology, Inc. (NASDAQ: MU), a stock that has gained more than 150 percent over the past year, reported a "great quarter" last week but the "very crowded long trade" sold off, David Seaburg, head of equity sales trading at Cowen & Company said during a recent CNBC "Trading Nation" segment.

"I just think in general, it's not because rates or yields are going to get away from us or rocket higher," he said. "I do not think that growth is dead. I think it takes a near term pause — maybe a little lower and you buy it [again] towards the end of the year."

Value Of Growth

Names within the S&P growth category have been outperforming names in the value category by almost 3 percent just in the month of June alone, Erin Gibbs of S&P Global added to the conversation.

But now an S&P 500 growth index (which includes stocks trading at low prices versus earnings, sales or book value) is expected to benefit from an overall earnings per share growth of 7.7 percent in the back half of 2017. By comparison, an index that offers exposure to value stocks is projected to see an earnings growth of 14.1 percent over the same time period.

"This is all about forward looking growth, not the past," she explained. "And this is what we are seeing for the next six month to even the next 12 months."

At time of publication, shares were up 4.14 percent at $30.34.

Related Links:

3 Sectors Lagging The S&P 500 By A Huge Amount

ETFs Dominate First Half Leaving Active With Work To Do

Posted-In: CNBC David Seaburg Erin Gibbs Growth stocksNews Movers Tech Media Best of Benzinga

 

Related Articles (MU)

View Comments and Join the Discussion!

Planes, Trains And Automobiles: Expedia To Benefit From Growth In All The Above

The History Of Ethereum, In One Infographic