Most market commentators believe that the valuation of a growth stock reflects the likely future growth rate of the company. Stocks trading at above average earnings multiples are expected to grow at above average rates.
In reality, high valuations often simply reflect how much growth has already taken place. They do not say anything about the future. Moreover, as the end market becomes saturated, as can happen with...
Industry Voice: Watch Rob Burnett discuss why he believes markets are overreacting to recent events in Italy and the key catalysts required for value strategies to outperform.
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