Fundamental value investors find it more difficult to ferret out individual stocks.

James Campbell

2017-06-03 05:35:00 Sat ET

Fundamental value investors, who intend to manage their stock portfolios like Warren Buffett and Peter Lynch, now find it more difficult to ferret out individual stocks that currently experience substantial market undervaluation. During the current economic boom, a rising tide lifts all boats, especially for tech firms, banks, and energy companies. Written by Parnassus equity portfolio managers, this article seems to emphasize the general observation that most health care and biotech stocks seem reasonably cheap relative to most market benchmarks.

However, we believe it is not likely for these health care and biotech stocks to bounce back during the current Trump administration. President Trump seeks to cut medical costs and drug prices substantially in the next few years to make health care more affordable for the American middle class without Obamacare.

The resultant competitive landscape for these health care and biotech firms becomes a unique one with fewer moats across the pharmaceutical industry spectrum. This key motif serves as part of the broader mantra of Trumponomics.

This analysis draws investor attention to big banks with minimal financial stress (after they pass the Federal Reserve's macroprudential stress test), tech stocks with average P/E ratios well above 25x (especially for FAMGA aka Facebook, Apple, Microsoft, Google, and Amazon), and energy companies (such as PSX or Phillips 66 that Warren Buffett has included as a new value stock in Berkshire Hathaway's portfolio in recent times).

The law of inadvertent consequences counsels caution.


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

U.S. trading partners such as the European Union, Canada, China, Japan, Mexico, and Russia voice their concern at the WTO.

James Campbell

2018-07-05 13:40:00 Thursday ET

U.S. trading partners such as the European Union, Canada, China, Japan, Mexico, and Russia voice their concern at the WTO.

U.S. trading partners such as the European Union, Canada, China, Japan, Mexico, and Russia voice their concern at the World Trade Organization (WTO) in ligh

+See More

Would you rather receive $1,000 each day for one month or a magic penny that doubles each day over the same month?

Laura Hermes

2017-04-07 15:34:00 Friday ET

Would you rather receive $1,000 each day for one month or a magic penny that doubles each day over the same month?

Would you rather receive $1,000 each day for one month or a magic penny that doubles each day over the same month? At first glance, this counterintuitive

+See More

To secure better E.U. economic arrangements, Jeremy Corbyn encourages Labour legislators to back a second referendum on Brexit.

Olivia London

2019-06-17 11:25:00 Monday ET

To secure better E.U. economic arrangements, Jeremy Corbyn encourages Labour legislators to back a second referendum on Brexit.

To secure better economic arrangements with European Union, Jeremy Corbyn encourages Labour legislators to back a second referendum on Brexit. In recent tim

+See More

Former Vice President Joe Biden enters the next U.S. presidential race with many moderate policy proposals.

Monica McNeil

2019-05-05 10:34:00 Sunday ET

Former Vice President Joe Biden enters the next U.S. presidential race with many moderate policy proposals.

Former Vice President Joe Biden enters the next U.S. presidential race with many moderate-to-progressive policy proposals. At the age of 76, Biden stands ou

+See More

Goop Founder and CEO Gwyneth Paltrow serves as a great inspiration for female entrepreneurs.

Laura Hermes

2019-12-01 10:31:00 Sunday ET

Goop Founder and CEO Gwyneth Paltrow serves as a great inspiration for female entrepreneurs.

Goop Founder and CEO Gwyneth Paltrow serves as a great inspiration for female entrepreneurs. Paltrow designs Goop as an online newsletter, and this newslett

+See More

President Donald Trump blames China for the long prevalent U.S. trade deficits and several other social and economic deficiencies.

Apple Boston

2025-01-22 08:35:08 Wednesday ET

President Donald Trump blames China for the long prevalent U.S. trade deficits and several other social and economic deficiencies.

President Donald Trump blames China for the long prevalent U.S. trade deficits and several other social and economic deficiencies. In recent years, Pres

+See More