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Tactical Valuation Update – July 2021

July 20, 2021

The notable tactical valuation themes we observe in the current marketplace indicate that large cap stocks are slightly more attractive than their small cap peers. We also observe that investors can improve a portfolio’s intrinsic value characteristics by allocating towards highly profitable, growing stocks away from low profit, dilutive peers. […more]

Looking Back, Looking Forward – 2021Q2

July 16, 2021

Corporate America is chugging along and reporting strong earnings. For the SP500 index, 87% of its members have reported actual 21Q1 EPS above estimates, well above the five-year average of 74%. In aggregate, SP500 companies’ […more]

FAAMG Stocks: Valuation & Concentration

July 14, 2021

US market returns in Q2 were once again dominated by the top 5 market cap stocks following blockbuster earnings reports in April. In 2020, AAPL, MSFT, AMZN, GOOGL and FB (FAAMG) combined to represent nearly […more]

Intrinsic Value in Passive Indexing

June 15, 2021

While Applied Finance has long advocated for investors to consider the strategic advantages from incorporating a valuation-based discipline in portfolio construction and stock selection, this study provides compelling evidence that even passive allocations benefit when index weights are formed on intrinsic value characteristics instead of using market cap as a proxy. […more]

Valuations in the Energy & Utility Sectors

June 2, 2021

Looking at the most recent aggregate Valuation data, both the Russell 1000 and Russell 2000 look expensive relative to their long-term levels. On a sector basis, large and small cap Energy stocks, and large cap Utility stocks all seem attractive, while small cap Utilities appear expensive. […more]

Tactical Valuation Update – May 2021

May 11, 2021

Applied Finance will continue to monitor and report aggregate market valuation characteristics to help our research partners allocate capital in the current US equity landscape.  This update reflects aggregate valuation characteristics based on 4/30/21 closing […more]

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