Global investors should not be put off by
current equity market valuations, according to one global market strategist.
«
The current equity market valuation is certainly stretched in historical terms but it does not appear unreasonable based on the high level of corporate profitability,» he said.
Yet these earnings and revenue figures don't really support
the current equity market valuation for JPM — especially compared with more conservative names such as WFC or USB.
Not exact matches
«While the stock at its
current valuation is discounting the end of the Yieldco business model, we believe that management has a nice cushion of cash and several options to ride through this
market dislocation until cost of raising
equity for Yieldcos normalizes,» RBC Capital analysts said.
Equities are essentially 50 - year duration investments at
current valuations, and even if investors are passive and don't hold any view about future
market returns at all, one of the basic principles of financial planning is to align the duration of ones assets with the expected horizon over which the funds are expected to be spent.
Given the absence of a public trading
market of our common stock, and in accordance with the American Institute of Certified Public Accountants Accounting and
Valuation Guide,
Valuation of Privately - Held Company
Equity Securities Issued as Compensation, our board of directors exercised reasonable judgment and considered numerous and subjective factors to determine the best estimate of fair value of our common stock, including independent third - party
valuations of our common stock; the prices at which we sold shares of our convertible preferred stock to outside investors in arms - length transactions; the rights, preferences, and privileges of our convertible preferred stock relative to those of our common stock; our operating results, financial position, and capital resources;
current business conditions and projections; the lack of marketability of our common stock; the hiring of key personnel and the experience of our management; the introduction of new products; our stage of development and material risks related to our business; the fact that the option grants involve illiquid securities in a private company; the likelihood of achieving a liquidity event, such as an initial public offering or a sale of our company given the prevailing
market conditions and the nature and history of our business; industry trends and competitive environment; trends in consumer spending, including consumer confidence; and overall economic indicators, including gross domestic product, employment, inflation and interest rates, and the general economic outlook.
The additional factors considered when determining any changes in fair value between the most recent
valuation report and the grant dates included, when available, the prices paid in recent transactions involving our
equity securities, as well as our operating and financial performance,
current industry conditions and the
market performance of comparable publicly traded companies.
He discusses how he believes two pillars — consumer spending and corporate earnings — will continue to support US economic growth, and gives his take on
equity valuations and investment opportunities in the
current market environment.
Portfolio Manager Mark DeVaul discusses the strength of the U.S. consumer and shares his thoughts on
current market valuations, explaining why he remains optimistic about U.S.
equities in the
current low interest rate environment.
At
current levels of the
market, the yield of these bonds more than compensates for the possibility of capital growth in
equities (
valuations are stretched)
I'm talking about a long event horizon here, so my
current (mild) aversion to the US
equity market is more about
valuation & relative risk / reward, rather than its long - term prospects.
If you were 100 per cent in
equities, that's not really a balanced portfolio, and given
current valuations, I'd see this morning's flat
market opening as an opportunity to take off a bit of
equity risk: far better to do so when
markets are up or flat than when they are plummeting, which is evidently the fear everywhere in the world except — ironically — in the United States itself.
Moreover, the US stock
market has also been on a multi-year run, which is inducing asset managers to speculate on the sustainability of
current valuations across US capital
markets.1 If a lower dividend yield is associated with expensive
equities, then a lower bond yield should indicate expensive Treasuries.
Understand where the
current U.S.
equity markets are in relationship to their historical
valuation measures.
In my opinion, to justify
current equity valuations and experience further gains, stock investors need perpetually low interest rates and a stable bond
market.