By Philip van Doorn, MarketWatch
Bloomberg
Mark Hulbert, a MarketWatch columnist and stock market analyst with decades of experience, published an article that takes a balanced look at recent evidence that growth strategies may be replaced by value.
You can read Hulbert’s analysis here, and I urge you to do so. You may be surprised that his data point to the last dozen years as being an anomaly — value strategies have beaten growth over very long periods.
If you expect the outperformance of growth stocks to continue, you may be interested in this interview with Justin White, the manager of the T. Rowe Price New America Growth Fund /zigman2/quotes/200582479/realtime PRWAX +0.68% .
Getting back to value, Hulbert compared the recent performance of the S&P 500 Value Index against that of the S&P 500 Growth Index. These are overlapping subsets of the benchmark S&P 500 /zigman2/quotes/210599714/realtime SPX +0.61% . Here’s how all three indexes have performed during September.
FactSet
The S&P 500 Value Index is made up of 382 stocks, drawn from the S&P 500 by S&P Dow Jones Indices, based on price-to-book-value, price-to-earnings and price-to-sales ratios.
These ETFs track the S&P 500 Value Index:
• SPDR Portfolio S&P 500 Value ETF /zigman2/quotes/203509323/composite SPYV -0.05% — annual expenses are 0.04% of assets.
• Vanguard S&P 500 Value ETF /zigman2/quotes/201497396/composite VOOV -0.05% — expense ratio: 0.15%.
• iShares S&P 500 Value ETF /zigman2/quotes/206097129/composite IVE +0.0083% — expense ratio: 0.18%.
• The Invesco S&P 500 Enhanced Value ETF /zigman2/quotes/206097129/composite IVE +0.0083% takes a more ”aggressive” approach to value, concentrating the portfolio in 100 stocks among the S&P 500 with the highest value scores. Its expense ratio is 0.13%.
Analysts’ favorite value stocks
Among stocks in the S&P 500 Value Index, Apple /zigman2/quotes/202934861/composite AAPL +3.47% has, by far, the heaviest weighting, making up 8.7% of SPYV. But Apple doesn’t make the list below, as only 52% of analysts polled by FactSet rate the shares a “buy” or the equivalent. The next largest holding is J.P. Morgan Chase /zigman2/quotes/205971034/composite JPM -0.06% , with 44% “buy” ratings, and the third is AT&T /zigman2/quotes/203165245/composite T -0.03% , which also has 44% “buy” ratings.
Here are the 20 stocks in the S&P 500 Value Index with the highest percentage of “buy” or equivalent ratings among analysts polled by FactSet:
| Company | Ticker | Share 'buy' ratings | Share neutral ratings | Share 'sell' ratings | Closing price - Oct. 21 | Consensus price target | Implied 12-month upside potential |
| Assurant Inc. | /zigman2/quotes/202796064/composite AIZ | 100% | 0% | 0% | $127.56 | $143.25 | 12% |
| Marathon Petroleum Corp. | /zigman2/quotes/209634297/composite MPC | 95% | 5% | 0% | $64.67 | $78.74 | 22% |
| L3Harris Technologies Inc. | /zigman2/quotes/201997607/composite LHX | 94% | 6% | 0% | $199.66 | $241.67 | 21% |
| Pioneer Natural Resources Co. | /zigman2/quotes/206736173/composite PXD | 93% | 7% | 0% | $125.39 | $175.45 | 40% |
| Cigna Corp. | /zigman2/quotes/208431372/composite CI | 92% | 8% | 0% | $166.74 | $210.32 | 26% |
| FLIR Systems Inc. | /zigman2/quotes/207487690/composite FLIR | 90% | 10% | 0% | $53.43 | $58.89 | 10% |
| Equinix Inc. | /zigman2/quotes/208927761/composite EQIX | 88% | 8% | 4% | $577.35 | $578.27 | 0% |
| Centene Corp. | /zigman2/quotes/208900023/composite CNC | 88% | 12% | 0% | $45.77 | $68.35 | 49% |
| Norwegian Cruise Line Holdings Ltd. | /zigman2/quotes/204183397/composite NCLH | 88% | 12% | 0% | $50.95 | $64.56 | 27% |
| Jacobs Engineering Group Inc. | 88% | 12% | 0% | $93.11 | $94.93 | 2% | |
| LKQ Corp. | /zigman2/quotes/210317139/composite LKQ | 87% | 13% | 0% | $31.65 | $35.83 | 13% |
| Valero Energy Corp. | /zigman2/quotes/200735463/composite VLO | 86% | 14% | 0% | $93.21 | $99.79 | 7% |
| Quanta Services Inc. | /zigman2/quotes/203420082/composite PWR | 86% | 14% | 0% | $40.54 | $44.14 | 9% |
| UnitedHealth Group Inc. | /zigman2/quotes/210453738/composite UNH | 85% | 15% | 0% | $243.92 | $285.88 | 17% |
| Baker Hughes Co. Class A | /zigman2/quotes/205323712/composite BKR | 85% | 15% | 0% | $22.12 | $29.13 | 32% |
| TechnipFMC PLC | /zigman2/quotes/207530935/composite FTI | 85% | 12% | 3% | $23.25 | $30.89 | 33% |
| PVH Corp. | /zigman2/quotes/208313660/composite PVH | 84% | 11% | 5% | $89.35 | $100.89 | 13% |
| Lennar Corp Class A | /zigman2/quotes/202536373/composite LEN | 84% | 16% | 0% | $61.02 | $64.50 | 6% |
| IQVIA Holdings Inc. | /zigman2/quotes/208640480/composite IQV | 84% | 11% | 5% | $143.14 | $176.06 | 23% |
| Mondelez International Inc. Class A | /zigman2/quotes/201769764/composite MDLZ | 84% | 16% | 0% | $53.57 | $61.67 | 15% |
| Source: FactSet | |||||||
You can click the tickers for more about each company.
Don’t miss: How to identify U.S. stocks with attractive growth potential
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