What is value investing becoming for tech investors in 2024? With Nasdaq up 12% YTD, many high-growth tech names trade at inflated multiples. Value seekers target cash-rich, free-cash-flow-positive firms like Intel, trading at 13x forward earnings compared to sector medians above 25x. We're getting everything ready for you. The page is loading, and you'll be on your way in just a few moments. This means the types of stocks investors can access for a value portfolio have changed too. In the past, value stocks were usually more cyclically sensitive. Today, many high-quality companies meet value criteria, with higher profitability, durable growth prospects and less sensitivity to GDP growth. Meanwhile, the US market has become less capital intensive. As a result, the traditional way of looking at value companies, through a price/book value lens, is inadequate. Instead, we think free cash flow (FCF) metrics are a better way to pinpoint value companies that can perform in different economic conditions. Over the last decade, value stocks with strong cash-flow yields have generally underperformed ( Display ). In our view, this trend will eventually revert to the mean, and attractively valued shares of companies with strong FCF will be rewarded.
