Not that I want to be the one spinning anything in equities at this point as positive, but, if you look at S&P valuations(courtesy bloomberg) based upon two particular metrics, you find that on a price/book AND a price/cash flow(trailing) you do NOT find overvaluation. In fact, if you consider the price/cashflow metric alone, it appears relatively inexpensive.
Next, if you look at both trailing PE and estimated PE, the valuation falls into a mid range.
But, this is NOT the case if you look at trailing Price/ebitda. In this case, it shows extreme overvaluation.
One last thought, especially as it relates to the P/Book ratio, this metric seems at odds with the continued profit margin strength.
So , this reminds me of one of the old timer adage's that I was taught early on in my career. The market does not care too much about "good or bad" it really cares about "better or worse". That is especially true when valuations are on the high side as they appear to be today.
Important Disclosure Information
Intellectus Partners, LLC ("Advisor") is a registered investment advisor with the Securities and Exchange Commission. This material is provided for informational purposes only. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be direct investment, accounting, tax or legal advice to any one investor. Consult with an accountant or attorney regarding individual accounting, tax or legal advice. No advice may be rendered, unless a client service agreement is in place.
This report has not been prepared, is not intended, and should not be interpreted as a research report regarding any securities of any company. The views contained herein should not be relied on as investment advice with respect to specific securities mentioned, because investment decisions should be based on numerous factors. Statements concerning economic, political or market trends or government policy decisions are based on current conditions, which may change. The views expressed in the referenced materials are subject to change based on market and other conditions. This document may contain certain statements that may be deemed forward‐looking statements.
Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur. Information is obtained from sources deemed reliable, but there is no representation or warranty as to its accuracy, completeness or reliability. All information is current as of the date of this material and is subject to change without notice. In providing this information the Advisor believes the information to be reliable, but has not in all cases independently verified such information. The information contained herein is general in nature, is provided for informational purposes only and is not investment advice. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, investment model, or products, including the investments, investment strategies or investment themes referenced herein, will be profitable, equal any corresponding indicated historical performance level(s), be suitable for a particular portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.