Only two years ago, the future seemed bright for nuclear energy. But after the devastating 2011 tsunami in Japan, the world has experienced a sea change in attitudes toward sustainable power sources. Indeed, where nuclear power recently seemed to promise an answer to our global energy needs, natural gas now appears to hold the key.
Sometimes an industry evolves beyond the research model that covers it. Consider the case of financial exchanges. Sell-side equity research in this area is divided regionally between Asia, Europe, and the United States, with little or no overlap. These regional boundaries, while they make sense for research specialization in other sectors, tend to ignore the
Financials and consumer discretionary stocks performed well in the risk-on environment of the third quarter. Also among cyclical stocks, we saw basic materials advance in the quarter. I believe this is due in large part to economic stimulus from the Federal Reserve, which announced a third round of quantitative easing that was well received by
We are getting more signs that there may be earnings disappointments on the horizon, but I believe investors are prepared for this. In fact, expectations were low coming into the third quarter, but I believe the market acknowledged that even if earnings were weak, valuations still weren’t stretched. Also worth noting is the fact that
Successfully predicting big earnings surprises — and avoiding the largest negative-surprise stocks — can carry big potential rewards. Two researchers at PanAgora Asset Management demonstrate how. Breaking down the broad stock market (as measured by the Russell 3000 Index) into quintiles of earnings surprise between 1991 and 2008 shows that stocks with the largest positive
It is often declared that a good time to buy a stock is when it’s on sale. But at Putnam, we believe that valuation — the relationship between price and earnings, or between price and free cash flow, to take two common examples that indicate a stock’s relative “cheapness” — is rarely all that matters.
Active fundamental research indicates the housing sector, along with areas of the energy and health-care industries, offer attractive opportunities for investors today.
Today’s low corporate default rate combined with attractive credit spreads and equity valuations provide an attractive climate for convertible securities, according to Putnam’s fundamental research.
While investors may express commitment to a long-term view, all too often volatility can have a negative impact on behavior and turn potential gains into losses. This common response to uncertainty is demonstrated clearly in DALBAR’s 2012 Quantitative Analysis of Investor Behavior. In the study, DALBAR found that while the Standard & Poor’s 500 Index