The traditional playbook that investors have used to navigate market cycles has become outdated. Certain sectors usually become inexpensive after the type of market run that we’ve experienced during the past few years. But, because interest rates are so low, investors are chasing yield. That has kept certain stocks expensive when you wouldn’t normally expect them to be, based on past cycles. At the same time, other sectors look attractive when they would normally be out of favor.Read More
The pharmaceuticals industry is in the midst of a renaissance. Patent expiration concerns, pipeline disappointments and setbacks, and a highly uncertain regulatory backdrop have forced managements to rethink the way they have historically conducted business. In this environment, certain companies stand out to us as deep value opportunities — businesses whose stock prices don’t reflect our view of their long-term potential.Read More
This is the second in a three-part series on sector opportunities as seen by a contrarian value investor — Senior Portfolio Manager Kevin Holt. The previous post discussed financials.
Demand for oil is growing at 1% to 1.5% per year. Production from many current wells is declining in the neighborhood of 5% annually. And new production is increasingly difficult and costly to locate. All this means that the oil industry must run quickly just to stay in the same place.Read More
This is the first in a three-part series on sector opportunities as seen by a contrarian value investor — Senior Portfolio Manager Kevin Holt.
In the wake of the Great Recession, and significant regulatory changes, investors are concerned that large banks may not be able to generate the type of profits that they have in the past. We don’t disagree with that assessment. However, we do disagree with the current equity valuations of the large banks — we believe the market has priced in a too-pessimistic view of profitability.Read More