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Report: Will Value Stocks Rise Again?
Growth stocks outperformed Value for the last couple of years.1 And Value may continue to lag Growth.
But our personal investments remain in Value stocks. Now, some Growth stocks are facing scrutiny.
Growth stocks are often young companies whose earnings and sales are expected to increase at a rate much higher than the average company. We believe that most investors in Growth stocks pre-pay for potential growth that may or may not materialize. Conversely, we believe that Value stocks trade below their estimated fair value for the company’s shares, essentially making them “on sale.” Their prices are discounted based on bad news or low expectations that may or may not materialize.
Picture high-fives and fist-bumps amongst early investors in Google (GOOG). But Blue Apron (APRN) investors could be long-faced and irritable. Freshly sharpened pencils now raise questions about the valuation of other Growth stocks:
- HubSpot’s (HUBS) growth trajectory doesn’t match their multiples.2
- Tesla’s (TSLA) “huge” valuation is hard to justify.3
- “Uber (UBER) looks even more dangerous than Lyft (LYFT).”4
The October 2019 edition of The Prudent Speculator newsletter slugged through the murky waters of Growth vs. Value investing.
Download this free report and decide for yourself. Is our commitment to Value investing ill-founded?
