Bill Nygren: There Is An Unusually Large Opportunity To Add Value By Focusing On Stock Price

Johnny HopkinsBill NygrenLeave a Comment

In the latest article from Oakmark titled – The Opening Ceremony of the Value Recovery, Bill Nygren believes there is an unusually large opportunity to add value by focusing on stock price rather than just expected earnings growth. Here’s an excerpt from the article:

So, is this the end of the value run?

Bill Nygren, Harris Associates Chief Investment Officer-U.S. Equities, recently weighed in on the subject on a quarterly shareholder call. “For those of you who are concerned that the value run might be over, clearly our funds have had an unusually good trailing year. But that outperformance wasn’t driven by a good relative period for value.

The Russell Value and the Russell Growth Indexes each increased by similar amounts, 43.7% and 42.4% respectively, over the past year through June 30. So everything I’ve been talking about over the past year, highlighting what we believe is an unusually large opportunity to add value by focusing on stock price rather than just expected earnings growth, is just as valid today as it was then.”

We think the latest bout of uncertainty provides a great opportunity. We don’t believe investors should be underweight value going into an accelerating period of economic growth. At Oakmark, our experience suggests we are closer to the opening ceremony than the closing ceremony of the value recovery.

You can read the entire article here:

The Opening Ceremony of the Value Recovery

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