Finding Cheap Stocks Isn’t Easy These DaysNovember 06, 2013
Earlier today we highlighted how overbought the Telecom sector was, so we thought it only fair to mention that by some valuation metrics it is also the cheapest sector, on average. Below we show two tables of valuation breadth metrics. The first table shows the percent of stocks in each sector that are within 20% of their five year max valuation and the second table shows the percent of stocks within 20% of the five year minimum valuation. Each table is sorted from highest to lowest in the Price to Sales column and the constituents are all 1600 companies in the MSCI World Index. The standout in the bottom table is the Telecom sector, where one might find at least a few stocks near their low valuation over the last five years. By no means are most stocks in that sector (or any other sector for that matter) cheap though. If anything, the below two tables just highlight how difficult it is becoming to find good values. This picture looks a lot more like 2007 or 2000 than 2009 or 2002.