Rafael Resendes, one of the founders of Applied Financial Capital Management, says the company has found attractive buying opportunities in the stock market, including some large technology companies. The foundation of applying financial capital management company is the study of company valuation.
Undervalued high-quality companies are now on sale. " The stocks he chose included the technology giant Apple., Microsoft、 FacebookAnd Wal-Mart.And McDonald's.。
When looking for "intrinsic value", Resendes says he is not looking for companies that seem cheap in terms of price-to-book ratios. Instead, according to the co-founder, in forecasting a company's profitability, R & D is partly seen as an investment rather than an expense in accordance with traditional accounting standards.
Us stocks have been falling this week, with the tech-heavy Nasdaq down more than the S & P 500 1.17% and the Dow 1.24% down 0.80%. But while many investors are increasingly concerned that technology stocks are overvalued, Resendes says his model shows that growth companies are starting to become attractive this year.
He now sees a "tug of war" between growth and value, but says there is no "competition" between the two investment styles.
"We have been looking for undervalued stocks."
Growth stocks have been lagging behind value stocks in 2021, a shift that followed years of growth stocks' performance.FactSet data showsAs of Wednesday, the Russell 1000 growth index had risen 1.4 per cent, or 1.07 per cent, this year, far less than the 14.1 per cent, or 1.31 per cent, rise in the Russell 1000 value index.
"the difference between us and most people is that we don't think value is necessarily that attractive," he said. "
Some of Resendes's favorite technology companies have had mixed performance so far in 2021. As of Wednesday, apple's shares are down about 7.5% this year, while Microsoft is up 7.5% and Facebook is up 10.8%.
By contrast, the Nasdaq is up just 1.1% in the year to Wednesday's close, while the s & p 500 is up 8.2% and the Dow is up 9.7%.
Resendes saidLarge technology stocks are likely to be more "controversial" in terms of buying opportunities because of concerns from other investors that they are overvalued. But he believes that "these stocks will rise sharply."