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Three Reasons Financial Stocks Offer Good Value
September 08, 2014 at 19:00 PM EDT
In recent months, I’ve been advocating that investors focus on those market segments that are more reasonably priced with an emphasis on certain cyclical sectors. Six years after the 2008 financial crisis, there are a few cyclical sectors that seem to offer particularly good value. One is the financials sector. Financial stocks, as represented by the S&P Global 1200 Financials index, are trading at a discount to the broader global market, when measured by both price-to-book and price-to-earnings valuation metrics. Global banking stocks are currently valued at around 1.2x book value, trading at nearly a 40% discount to the broader global market. In price-to-earnings terms, the financials sector is trading at 14.8x trailing earnings, making it the lowest valued among the ten global sectors. This, of course, leaves open the question of whether or not financials constitute a “value trap.” Many market watchers, for instance, argue that the sector’s lower […] Click here to read the original article on ETFdb.com. Related Posts: No Related Posts
In recent months, I’ve been advocating that investors focus on those market segments that are more reasonably priced with an emphasis on certain cyclical sectors. Six years after the 2008 financial crisis, there are a few cyclical sectors that seem to offer particularly good value. One is the financials sector. Financial stocks, as represented by the S&P Global 1200 Financials index, are trading at a discount to the broader global market, when measured by both price-to-book and price-to-earnings valuation metrics. Global banking stocks are currently valued at around 1.2x book value, trading at nearly a 40% discount to the broader global market. In price-to-earnings terms, the financials sector is trading at 14.8x trailing earnings, making it the lowest valued among the ten global sectors. This, of course, leaves open the question of whether or not financials constitute a “value trap.” Many market watchers, for instance, argue that the sector’s lower […]
