Growth stocks vs Value stocks
“Hi James and Crew. There is a lot of talk about transferring from growth to value stocks. I recall you agree with this. Can you define value stocks and could you recommend 5 to watch.” - Many Thanks, Peter C.
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Answer
Morning Peter,
Value stocks are generally mature businesses which have some but unspectacular growth while requiring an economic tailwind to perform. Because of this lower growth and need for an improving economy they trade on lower multiples / valuations than a growth stock. The Banks and Resources are our favourite 2 sectors which fit into this group on the ASX, with both offering attractive yields compared to the market and of course term deposits.
MM believes the Value stocks will enjoy some “catch-up outperformance” over growth through 2021/ 22
