Where is the value?
StocksInValue’s David Walker explains where to find cheap stocks in a pricey market.
Over time, share prices converge to intrinsic value and that investors should have a rational process for knowing what a company is worth while having rational inputs on return on equity, capital allocation and risk.
In light of the increasing interest rates in the US and QE, Jackson Hewett from Business Spectator asks what does this mean for investors. The volatility in global equity markets are are historically low, David Walker says conservative investors who do not overpay for stocks will be the winners of the market.
However with dividend obsessed investors, this has pushed the Australian market to hefty valuations, but there are good stocks out there according to David Walker of StocksInValue. Some examples of undervalued companies include McMillan Shakespeare (ASX:MMS) and ANZ Banking Group (ASX:ANZ).
The dividend obsession in Australia has inflated the share price and valuation of equities. David has suggested it is the time for investors be cautious, conservative, to know what what companies are worth and if you do buy equities, only buy at a discount to value.
With insights from John Abernethy and George Whitehouse of Clime Asset Management.
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