In his latest interview on CNBC, Bill Nygren explained why low PE stocks provide a very good hunting ground for long-term investors today. Here’s an excerpt from the interview:
At Oakmark we think really long term and you look back over the past decade it has been a great decade for growth stocks. and that’s not so much because their fundamental performance has been so much better than inexpensive stocks, it’s because their PE’s have expanded.
So you see the S&P500 today selling at something over 20 times next year’s earnings, but there aren’t a lot of stocks at 20 times earnings.
There are a lot that are over 50 times and then there are a bunch of them that are down around 10 times, so at Oakmark we’re anticipating that growth stock multiples will come down a little bit and that the low PE stocks provide very good hunting ground for long-term investors today.
You can watch the entire interview here:
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