Is there a gap between growth and value?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
TheoLeo
Posts: 241
Joined: Mon Apr 02, 2018 11:39 am

Is there a gap between growth and value?

Post by TheoLeo »

People like to tilt toward growth (tech) and value (energy and financials). Is there an exploitable gap between? I am thinking of established consumer staple companies that don´t grow but deliver consistent revenue with a P/E ratio between 20 and 25. Or are these companies usually covered by both growth and value funds?
Valuethinker
Posts: 41430
Joined: Fri May 11, 2007 11:07 am

Re: Is there a gap between growth and value?

Post by Valuethinker »

TheoLeo wrote: Sat Nov 21, 2020 8:17 am People like to tilt toward growth (tech) and value (energy and financials). Is there an exploitable gap between? I am thinking of established consumer staple companies that don´t grow but deliver consistent revenue with a P/E ratio between 20 and 25. Or are these companies usually covered by both growth and value funds?
Usually they are in the growth indices. Think Nestle Unilever Reckitt etc.

And such companies do grow. Sales grow by inflation plus a few per cent, EPS grows faster due to stock buybacks.

Thing to watch for is if they are steadily increasing debt to keep that say 7 to 8 per cent EPS growth.
tibbitts
Posts: 12245
Joined: Tue Feb 27, 2007 6:50 pm

Re: Is there a gap between growth and value?

Post by tibbitts »

TheoLeo wrote: Sat Nov 21, 2020 8:17 am People like to tilt toward growth (tech) and value (energy and financials). Is there an exploitable gap between? I am thinking of established consumer staple companies that don´t grow but deliver consistent revenue with a P/E ratio between 20 and 25. Or are these companies usually covered by both growth and value funds?
I assume what you are looking for isn't so much consumer staples (which are easy enough to identify invest in), but a fund that captures equities residing (or transitioning?) through the middle portion of the growth/value spectrum. I'm not sure that's widely regarded as exploitable or that there is a fund that captures those equities, but with so many funds and ETFs out there, probably there is. Similarly if you're looking for a subset of only consumer staples based on your criteria, I don't know if there is a vehicle for that.
Post Reply