The low valuation multiples for value stocks provide a margin of safety that growth stocks rarely offer. However, the challenge lies in determining whether these cheap assets are genuinely undervalued or simply on sale due to their potentially deteriorating business models.
Stocks trading between $10 and $50 can be particularly interesting as they frequently represent businesses that have survived their early challenges. However, investors should remain vigilant as some may still have unproven business models, leaving them vulnerable to the ebbs and flows of the broader market.
From novel pharmaceuticals to telemedicine, most healthcare companies are on a mission to drive better patient outcomes. But speed bumps such as inventory destockings have persisted in the wake of COVID-19, and over the past six months, the industry has pulled back by 9.4%. This performance was disheartening since the S&P 500 held its ground.
Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on. But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.
Healthcare companies are pushing the status quo by innovating in areas like drug development and digital health. Despite the rosy long-term prospects, short-term headwinds such as COVID inventory destocking have harmed the industry’s returns - over the past six months, healthcare stocks have collectively shed 9.4%. This performance was disappointing since the S&P 500 held its ground.
Consumer staples are considered safe havens in turbulent markets due to their inelastic demand profiles. But recently, the industry has failed to do its job as it shed 9.5% over the past six months. This drop was especially discouraging since the S&P 500 held steady.
Whether you see them or not, industrials businesses play a crucial part in our daily activities. Unfortunately, this role also comes with a demand profile tethered to the ebbs and flows of the broader economy, and investors seem to be forecasting a downturn - over the past six months, the industry has pulled back by 6.2%. This drop was disheartening since the S&P 500 held steady.
The best-performing stocks typically have robust sales growth, increasing margins, and rising returns on capital, and those that can maintain this trifecta year in and year out often become the legends of the investing world.
March has been a dizzying month for US markets. The S&P 500 just posted two days of back-to-back gains, but the benchmark index is still down almost 5% this month.
FRANKFURT (Reuters) -German pharmaceuticals company Stada has postponed a planned initial public offering (IPO) in Frankfurt because of market volatility, two people familiar with the matter told Reuters on Tuesday. Bankers preparing the potential offering for Stada's shareholders Bain Capital and Cinven advised against going ahead with the listing this week, citing recent volatility related to geopolitical events, the people said. In recent weeks, key market volatility gauges have been rising on the back of geopolitics and the risk of trade wars prompted by U.S. President Donald Trump, Reuters has reported.