Looking for quality and value is so popular that it’s hard to find an edge. Undervalued stocks can stay that way for years on end, and high-quality stocks that have run hard can come to a sudden stop. Andrew Martin, Portfolio Manager at Alphinity Investment Management, says the earnings cycle is key.
“Earnings upgrades are serially correlated – that means there’s usually more than one of them. An earnings surprise is new good news coming into the market, so that tends to drive share prices up.”
In the full video below, Andrew explores one sector that’s at the beginning of an upgrade cycle but is being ignored due to a quirk of accounting policies.
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Thanks for these insights Andrew! A outstanding summary of the process and insurance sector. Look forward to hearing more from the team at this years Queensland Adviser Road show in October.