The Value Perspective
The Value Perspective is an extensive resource for providing information on 'value investing' in UK equities. Value investing is a proven, long-term approach which focuses on exploiting swings in stockmarket sentiment, targeting companies which are valued at less than their true worth and waiting for a correction. We aim to share the thoughts, opinions and passions of three experts in this field, along with independent commentators, providing greater insight into this often poorly understood area of UK equity investing.
The Value Perspective News
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NEWGrains of truth - The three factors that exacerbate stockmarket stress points17 May 2013
William Blake once wrote about the ability "to see the world in a grain of sand" and, while romantic poetry might be a little outside the usual scope of The Value Perspective, we were interested to read financial writer John Maudlin's recent thoughts on how grains of sand could offer some insight into the world of investing.
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Politically incorrect - Unfortunately investment considerations often come second to politics
15 May 2013
When to sell? It is, by common consensus, one of the most difficult areas of investment to get right. However given the increasingly loud calls, not least from the banks themselves, for the government to reduce its 39% and 82% stakes in, respectively, Lloyds and Royal Bank of Scotland (RBS) – we will at some point have a very public case study in the psychology of selling assets. For the record, we continue to believe both banks remain relatively attractive at current share prices, we use them here as a high profile example of why selling decisions can be so difficult.
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Invest in rhyme, expect a rough time - Valuation will help your portfolio climb
14 May 2013
Financial journalists presumably love the phrase ‘Sell in May and go away, don’t come back till St Leger’s Day’ because it makes for easy copy at this time of year. For investors, however, the expression’s only noteworthy quality is that it rhymes.
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Digging deeper - It takes more than a good listing to make a good investment
10 May 2013
Eurasian Natural Resources Corporation (ENRC) has been receiving a fair degree of media attention in recent weeks – little of it positive. While we do not want to comment on the various details that have now drawn the attention of the Serious Fraud Office (SFO) to the Kazakhstan-focused, FTSE 100-listed miner, a couple of more general investment points can usefully be made.
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Just an illusion - Investors often see a value trap where one simply does not exist
8 May 2013
The ‘value trap’ is a genuine investment risk but actual examples are a lot rarer than one might think given the frequency with which the market seems to spot them. A common misconception is a value trap is a company whose share price stands still or falls over a prolonged period of time and yet, within that definition, there still lies scope for stocks with the potential to double in value tomorrow.
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Initial step - Rentokil has shown how a disposal can affect value as much as an acquisition
7 May 2013
Here on The Value Perspective, we often talk about how an acquisition, and specifically the price paid for it, can enhance or destroy value in a business but we rarely look at the other side of the equation – how the disposal of an asset can affect the value of the company making the sale. Rentokil Initial’s sale of City Link to restructuring specialist Better Capital at the end of April affords such an opportunity.
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Right as rain? - Unlike many financial forecasters, the Met Office accepts the future is uncertain
3 May 2013
Criticising weather forecasters may be a national pastime in Britain but not on The Value Perspective. That might come as a surprise to regular visitors, who will have seen our less than favourable opinions of financial forecasters espoused in article such as Target practice, but we see important differences between those who predict the economic or market weather and those who focus on the real thing.
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Taking care of business - The UK's falling corporation tax rate should be good for its economy
1 May 2013
“I want us to send a message to anyone who wants to invest here, to create jobs here, that Britain is open for business,” said Chancellor George Osborne as he announced in his Budget that, with effect from April 2015, corporation tax would fall from 21% to 20%. The UK is not the only country trying to stimulate its economy in this way, however, so how is it measuring up against its global competitors?
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Target practice – We prefer to rely on our own company analysis rather than that of brokers
30 Apr 2013
Since dropping below 10p at the start of 2012, Dixons’ share price has rallied incredibly hard to the extent it now stands around 35p. So how would investors have fared if they had only relied on company brokers’ notes for guidance on whether to buy or sell? Not well, we would suggest, and for evidence we will consider the record of two such brokers, whom we will do the favour of keeping anonymous.
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On the level - An analysis of valuation proves not all stockmarket highs are created equal
26 Apr 2013
Here on The Value Perspective we may focus on the overarching importance of valuation in investment but we are not blind to the strange fixation people can have with 'market levels'. In reality, the level of any market is nothing more than a number and yet, for many investors, it can be a proxy for 'cheap' or 'expensive', 'attractive' or 'unattractive'.
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The views and opinions displayed on this website are those of Kevin Murphy, Nick Kirrage and Andrew Lyddon, members of the Schroder UK Specialist Value Team (the Value Perspective Team), and other independent commentators where stated. They do not necessarily represent views expressed or reflected in other Schroders' communications, strategies or funds. The Team has expressed its own views and opinions on this website and these may change. This item is intended to be for information purposes only and it is not intended as promotional material in any respect. Reliance should not be placed on the views and information on the website when taking individual investment and/or strategic decisions.
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