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Bill Nygren: You’ll find the best buys in 2023 among low P/E companies
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By Borsgade
- - Published
Bill Nygren of Oakmark writes in his market commentary for Q3 2023 that the most interesting hunting grounds this year are among companies with low P/E ratios.
He sees no real decline in the quality of companies that have the lowest P/E levels on the S&P500.
Among other things, he writes:
Currently, the 50th lowest P/E stock sells just over 8 times earnings, and the 50th highest sells at 60.
So, the highest priced stocks are about 7 times more expensive than the lowest priced. Over the 30-plus years we have data, the P/E ratio averages about 4, bouncing between 3 and 5. (So, if there are 50 stocks below 10 times earnings, there are 50 over 40.) It was meaningfully higher only one time—when it hit 9 times at the end of the internet and tech bubble in 2000.
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The above has been prepared by Børsgade ApS for information purposes and cannot be regarded as a solicitation or recommendation to buy or sell any security. Nor can the information etc. be regarded as recommendations or advice of a legal, accounting or tax nature. Børsgade cannot be held liable for losses caused by customers’/users’ actions – or lack thereof – based on the information in the above. We have made every effort to ensure that the information in the above is complete and accurate, but cannot guarantee this and accept no liability for errors or omissions.
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