Latest news with #valueinvesting
Yahoo
6 hours ago
- Business
- Yahoo
Why value investing has worked better outside the US
I recently interviewed investor and author Daniel Rasmussen for The Long View podcast, where he commented that 'value hasn't worked in the U.S., but it's worked fine internationally.' I was intrigued by this observation. So, I looked at Morningstar's indexes. Sure enough, value investing has prospered beyond American shores—this year, as well as over the past three-, five-, and 10-year periods. 'Magnificent Seven' vs. 'Granolas' US stocks of all styles have beaten international stocks for years, due to a strengthening dollar, superior returns on invested capital, and expanding price multiples. Morningstar's US growth index is dominated by the ' Magnificent Seven.' But internationally, the scale is far smaller. There is not a single public company outside the US currently worth $1 trillion. There was a time when the ' Granolas ' stocks were being promoted as Europe's answer to the Magnificent Seven (names like GSK, Roche, Nestle, L'Oreal and AstraZeneca). But don't blame yourself if you haven't heard of the Granolas. They never really rivaled the Magnificent Seven from a performance perspective. So, what has boosted value investing internationally? Largely, the financial-services sector (which was lifted by higher interest rates) and energy stocks. Looking beyond Europe with style While value has outperformed growth in Europe over the past five years, Europe now represents less than half of equity market capitalization outside the US. Rather, value stocks in emerging markets (like China, India, and Brazil) and developed Asia have outperformed by an even larger margin than in Europe. The decline of Chinese internet companies, which were once big growth stocks, helps explain why value investing has triumphed over growth investing in emerging markets in recent years. On the developed-markets side, Japan has seen rising interest rates and improved economic and investment conditions disproportionately benefit financial-services stocks, which tend to reside on the value side of the market. Value's underperformance in the US: Is it macro or micro? While I have mentioned some macroeconomic factors above, I am generally skeptical of attempts to explain style leadership from the top down. Back in 2022, when sticky inflation prompted the largest interest-rate hikes in a generation, US growth stocks fell much further than value. A popular narrative arose: Growth stocks are more sensitive to interest rates. But then growth bounced back in 2023 despite high rates. The Magnificent Seven and others rode a wave of enthusiasm for AI. Growth stocks' thriving amid higher rates is hardly unprecedented. Between 2015 and 2018, the US Federal Reserve hiked rates several times, yet growth beat value by a wide margin. Ultimately, I agree with Rasmussen that the triumph of growth over value in the US has more to do with 'historically unique and rare circumstances.' I've been following markets long enough to know that style leadership can be cyclical. Right now, it's value investing that's being fundamentally questioned. Value stocks have been called 'structurally challenged,' in 'secular decline,' and 'value traps.' But the value side of the market has always been home to troubled companies. Value investing is about stocks that under promise and overdeliver. Perhaps the long-term cycle will turn again in value's favor. AI could be revolutionary, but, like the internet, ahead of itself from an investment perspective. We could look back at 2025 as a historical inflection point, as marking a new market regime. The problem is that these things are only clear in retrospect. It will take time to know if the rotations we've seen in early 2025 will last, or if they're just head fakes. ____ This article was provided to The Associated Press by Morningstar. For more markets content, go to Dan Lefkovitz is a strategist for Morningstar Indexes.
Associated Press
7 hours ago
- Business
- Associated Press
Brandes Investment Partners Launches Global Value Fund in Australia
SAN DIEGO, July 30, 2025 /PRNewswire/ -- Brandes Investment Partners (Asia) Pte Ltd ('Brandes Asia'), part of the Brandes group of companies that includes Brandes Investment Partners L.P. ('Brandes'), today announced the launch of the Brandes Global Value Fund in Australia. A boutique independent investment management firm committed to value investing, Brandes is proud to launch this new fund which provides Australian institutional and wholesale investors an opportunity to access Brandes' 50+ years of experience navigating various global market conditions while applying its tried and tested value investing approach. The fund models the investment philosophy of Brandes' Global Equity strategy which has a track record going back to 1977 and will invest in a diverse mix of global equity securities spanning multiple regions and sectors. 'Brandes is well known to institutional investors around the world and in Australia as a consistent value investor. We are very excited to be launching the Brandes Global Value Fund to serve the Australian wealth channel,' said Oliver Murray, CEO of Brandes. 'Given the current geopolitical uncertainty and market volatility, we think that this is a particularly good time for investors in Australia to consider a manager with a track record of investing in global markets and through many challenging market events.' Managed by the firm's Global Large-Cap Investment Committee, the fund will seek to provide long-term capital appreciation by investing primarily in the equity securities of both U.S. and non-U.S. issuers by applying the Brandes investment approach of identifying undervalued companies through its independent research-driven fundamental valuation of those businesses. 'Brandes is delighted to bring an investment strategy with a long term track record to Australia's wealth channel,' said Anita Krishnamoorthy, CEO for Brandes Asia. 'The past year has been a stark reminder that reversals in markets exist. With the renewed interest in diversifying portfolios and going back to the basics of price disciplined stock picking, we believe this is a sound time to introduce a differentiated investment solution for Australian investors.' About Brandes Investment Partners Brandes is an independent boutique investment advisory firm, managing global equity and fixed-income assets for clients worldwide. Since the firm's inception in 1974, Brandes has consistently applied the value investing approach pioneered by Benjamin Graham to security selection and was among the first investment firms to invest globally using a value approach. The independently owned firm manages a variety of active investment strategies and applies its investment philosophy consistently in all market conditions. Headquartered in San Diego, Brandes and its related entities currently have offices in Milwaukee, Toronto, Dublin, and Singapore. View original content: SOURCE Brandes Investment Partners
Yahoo
3 days ago
- Business
- Yahoo
Tweedy Browne International Value Reduces Stake in Zurich Insurance Group AG by 74.44%
Exploring the Strategic Moves of Tweedy Browne International Value (Trades, Portfolio) in Q2 2025 Warning! GuruFocus has detected 4 Warning Signs with XSWX:ROG. Tweedy Browne International Value (Trades, Portfolio) recently submitted its N-PORT filing for the second quarter of 2025, shedding light on its strategic investment decisions during this period. The Tweedy, Browne Global Value Fund, established on June 15, 1993, is managed by a team of seasoned investment professionals, including Roger R. de Bree, Frank H. Hawrylak, Jay Hill, Sean McDonald, Thomas H. Shrager, John D. Spears, and Robert Q. Wyckoff, Jr. The fund adheres to a "Ben Graham" value-oriented approach, focusing on securities trading at discounts to intrinsic value. Primarily investing in foreign equity securities, the fund also explores U.S. equities when attractive opportunities arise, with a focus on developed markets and some exposure to emerging markets. Currency risk is mitigated by hedging foreign currency exposure back into the U.S. dollar where feasible. Summary of New Buy Tweedy Browne International Value (Trades, Portfolio) added a total of two stocks to its portfolio, including: The most significant addition was Azelis Group NV (XBRU:AZE), with 1,462,410 shares, accounting for 0.54% of the portfolio and a total value of 23.23 million. The second largest addition was Nakanishi Inc (TSE:7716), consisting of 543,990 shares, representing approximately 0.17% of the portfolio, with a total value of 7,140,470. Key Position Increases Tweedy Browne International Value (Trades, Portfolio) also increased stakes in a total of seven stocks, including: The most notable increase was in Nippon Sanso Holdings Corp (TSE:4091), with an additional 953,285 shares, bringing the total to 1,357,200 shares. This adjustment represents a significant 236.01% increase in share count, a 0.84% impact on the current portfolio, with a total value of 51,330,150. The second largest increase was in Teleperformance SE (XPAR:TEP), with an additional 253,802 shares, bringing the total to 809,227. This adjustment represents a significant 45.7% increase in share count, with a total value of 78.20 million. Summary of Sold Out Tweedy Browne International Value (Trades, Portfolio) completely exited three holdings in the second quarter of 2025, as detailed below: Johnson & Johnson (NYSE:JNJ): Sold all 177,077 shares, resulting in a -0.68% impact on the portfolio. Tarkett SA (XPAR:TKTT): Liquidated all 1,527,083 shares, causing a -0.66% impact on the portfolio. Key Position Reduces Tweedy Browne International Value (Trades, Portfolio) also reduced positions in 19 stocks. The most significant changes include: Reduced Zurich Insurance Group AG (XSWX:ZURN) by 136,083 shares, resulting in a -74.44% decrease in shares and a -2.21% impact on the portfolio. The stock traded at an average price of CHF 571.99 during the quarter and has returned -2.04% over the past three months and 8.87% year-to-date. Reduced BAE Systems PLC (LSE:BA.) by 3,928,420 shares, resulting in a -42.83% reduction in shares and a -1.85% impact on the portfolio. The stock traded at an average price of 17.77 during the quarter and has returned 9.75% over the past three months and 62.70% year-to-date. Portfolio Overview At the end of the second quarter of 2025, Tweedy Browne International Value (Trades, Portfolio)'s portfolio included 90 stocks. The top holdings included 3.63% in Roche Holding AG (XSWX:ROG), 3.58% in Nestle SA (XSWX:NESN), 3.55% in Safran SA (XPAR:SAF), 3.49% in United Overseas Bank Ltd (SGX:U11), and 3.36% in Novartis AG (XSWX:NOVN). The holdings are mainly concentrated in 10 of the 11 industries: Industrials, Consumer Defensive, Financial Services, Healthcare, Basic Materials, Consumer Cyclical, Technology, Energy, Communication Services, and Real Estate. This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
5 days ago
- Business
- Yahoo
The Best Artificial Intelligence (AI) Stock to Buy With the Market At All-Time Highs
Key Points Alphabet stock is still trading at a cheap multiple. It has many growth vectors to benefit from artificial intelligence. Margin can help the company's profits explode in the next few years. These 10 stocks could mint the next wave of millionaires › The S&P 500 keeps soaring to new highs, making it feel impossible to find a cheap large-cap stock to buy today. This is especially true in technology and artificial intelligence (AI). Stocks such as Nvidia and Microsoft have price-to-earnings (P/E) ratios approaching 40 or higher, making them risky for investors. Growth expectations are high for many companies, which can make it increasingly difficult to buy stocks for your investment portfolio, especially if you care about value investing. That isn't the case with every AI stock. Here's why Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is the one AI stock you can buy right now with stocks at all-time highs. Alphabet's matrix of growth Some pundits have deemed Alphabet -- parent company of Google -- an AI loser because of competition from ChatGPT. I think this underplays the big picture. Alphabet has perhaps the most to gain from AI through its various subsidiaries, while also employing the best data advantage of any big technology player because of all the user data from Google, YouTube, and other properties. AI is not going to eliminate Google Search -- it will take it to the next level. AI overviews are already growing like a weed for Google Search results, while the Gemini chatbot is helping with advanced conversational queries. An explosion in new AI technologies will greatly expand the addressable market for Google and its related properties. That's why revenue is growing at a 10% annual rate for Google Services, even though it generated $77 billion in revenue just in the first quarter. Another way Alphabet can benefit from AI demand is Google Cloud, which is growing revenue at an astonishing 28% year-over-year clip, and is close to surpassing $50 billion in annualized revenue (it may surpass that mark next quarter). AI workloads will need huge amounts of specialized computing power to function, which Google Cloud is set to provide. Let's not forget self-driving start-up Waymo, which is taking over the streets of America's big cities, using Alphabet's infrastructure, engineering, and AI expertise. It is an entire matrix of growth for Alphabet that can be supercharged by AI. Profit margin expansion? AI requires a lot of upfront spending on data centers and computer chips in order to train and operate. Alphabet is planning to spend $75 billion on capital expenditures in 2025, mostly related to AI. This will increase depreciation and require steady growth in order to get a return on this investment, which some investors are skeptical about. Google Cloud used to be unprofitable, but it posted an 18% operating margin last quarter, a number that can keep expanding as it reaches larger scale. Due to these factors plus better hiring efficiency employed by Alphabet coming out of the pandemic, I think Alphabet's profit margins are set to keep inching higher over the next few years. Its operating margin recently hit a record of 33%. With huge operating leverage on its fixed-cost investments, I think this figure can grow to 40% over the long term, which is similar to Microsoft. With revenue at $359 billion that could grow to $400 billion or even $500 billion within a decade, a 40% operating margin could help Alphabet grow its operating income to $200 billion within a few years. That would make it the most profitable company in the world. Buybacks and a cheap stock With all the earnings flowing to its balance sheet, Alphabet is returning capital to shareholders through buybacks and dividends. It pays a dividend yielding 0.42% that is set to grow steadily, while shares outstanding have fallen by 12% in the last 10 years. Alphabet plans to keep repurchasing stock at these cheap prices. It has a P/E ratio of 21, which is the cheapest among the "Magnificent Seven" stocks. This is shocking to see, given how much Alphabet can benefit from AI and cloud computing growth. Add everything up, and Alphabet looks like a fantastic stock to buy today, even with the market at all-time highs. Trump's Tariffs Could Create $1.5 Trillion AI Gold Rush The Motley Fool's analysts are tracking a massive shift in U.S. tech. Over $1.5 trillion is already flowing into infrastructure, AI, and advanced manufacturing… and the number keeps climbing. Following a major tariff policy shift, a new AI Gold Rush is taking shape, and we think . It builds the tech infrastructure that Apple, OpenAI, and others suddenly can't live without. We just released a full write-up on this under-the-radar stock — and why now might be the exact moment to move. Continue » *Stock Advisor returns as of July 21, 2025 Brett Schafer has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. The Best Artificial Intelligence (AI) Stock to Buy With the Market At All-Time Highs was originally published by The Motley Fool
Yahoo
5 days ago
- Business
- Yahoo
Warren Buffett Doesn't Want to Control a Company; Says Just Invest in ‘Wonderful' Businesses and Let Them Do the Rest
Warren Buffett, the longtime chairman and CEO of Berkshire Hathaway (BRK.B) (BRK.A), is celebrated for his disciplined, value-oriented approach to investing. In his 1981 shareholder letter, Buffett articulated a principle that continues to guide Berkshire's acquisition strategy: 'we would rather buy 10% of Wonderful Business T at X per share than 100% of T at 2X per share.' This philosophy stands in contrast to the prevailing mindset among many corporate managers, who often prioritize full ownership and control, sometimes at the expense of economic rationality. That's because Buffett's reasoning is rooted in a focus on maximizing real economic benefits rather than expanding managerial domain or inflating accounting figures. More News from Barchart 2 Recession-Proof Dividend Stocks to Buy for the Second Half of 2025 UnitedHealth Stock Spirals Lower Again. Don't Buy the Dip. This Self-Driving Car Stock Is Surging on a Major Nvidia Boost Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. In fact, the legendary investor has frequently cautioned that managers who stress 'accounting appearance over economic substance usually achieve little of either.' This perspective reflects his belief that the true measure of an investment lies in its underlying value, not in the optics of ownership or the ability to consolidate earnings on financial statements. Throughout his career, Buffett has demonstrated a willingness to take significant minority stakes in high-quality businesses when the price is right, rather than overpaying for full control. This approach allows Berkshire Hathaway to benefit from the growth and profitability of leading companies without incurring the risks or costs associated with outright acquisitions. Notably, this strategy has led to successful long-term investments in firms such as Coca-Cola (KO), American Express (AXP), and Moody's (MCO), where Berkshire's minority positions have generated substantial returns. Buffett's stance also reflects his broader skepticism of empire-building — a tendency among some executives to pursue acquisitions for the sake of expanding their influence, rather than to create genuine shareholder value. He has repeatedly emphasized that capital should be allocated where it can generate the highest real return, regardless of whether that means owning a small piece or the entirety of a business. The relevance of Buffett's 1981 guidance is evident in today's market environment, where mergers and acquisitions remain a central feature of corporate strategy. As companies face pressure to grow and diversify, the temptation to pursue large, transformative deals can be strong. Yet Buffett's preference for economic substance over managerial control serves as a reminder that disciplined, value-driven decision-making is often the more prudent path. Buffett's enduring influence is grounded in his consistency and transparency. His annual letters, including the 1981 edition, offer investors and business leaders a blueprint for rational capital allocation and long-term thinking. By prioritizing real economic benefits over the allure of control or superficial accounting gains, Buffett has built Berkshire Hathaway into one of the world's most respected and successful conglomerates — a testament to the power of value-driven leadership On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
