Beyond the intuitive reason that their cash reserves are higher, these so-called quality stocks are in vogue because they've outperformed others splurging cash over the past year., when interest rates were close to zero, companies with the weakest balance sheets were able to tap the debt markets to raise capital. But that source of easy money was gradually closed off as interest rates rose, raising the allure of companies with more cash discipline.
And yet, Kostin's team found a more specific performance trend that runs counter to the marketwide preference for quality: companies racking up more debt are outperforming those reducing their debt."Debt reducers" have underperformed"debt issuers" by 10 percentage points over the past year — 3% versus 13%, Kostin said.
This meant that Goldman's baskets of stocks skewed towards companies with lower valuations, Kostin said."Our long/short value factor has lagged by 12% during the past year as investors have continued to reward growth stocks ," he added.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:
Business Business Latest News, Business Business Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Firing workers costs big companies like General Motors billions — here's why retraining them could be a better bargainRetraining employees could save companies billions in restructuring costs, but many firms and the US government do not invest in re-skilling programs. Yup! Not hiring employees who aren’t right for the job in the first place is a much better approach.
Source: BusinessInsider - 🏆 729. / 51 Read more »
This Might Be the Last Great Stock Picker’s MarketIt’s now easier for global fund managers to invest in Shanghai and Shenzhen-listed shares, thanks to programs such as Stock Connect, a trading link with Hong Kong. This could be a fertile hunting ground for savvy investors. Keep pushing the FOMO garbage, so people can plow their money indiscriminately into the market. Panic buying into a market at all time highs, what could go wrong.
Source: WSJ - 🏆 98. / 63 Read more »
Investors are demanding record amounts to hold Tesla debt as the company's profit woes mountTesla's junk bonds reached a record premium after the company reported another quarterly loss on Wednesday night.
Source: BusinessInsider - 🏆 729. / 51 Read more »
A simple trading strategy made investors 42% in just 6 days last earnings season. Here's how Goldman Sachs says you can replicate it.Goldman Sachs just unveiled an simple earnings-season trading strategy that returned 42% over just six days last quarter.
Source: BusinessInsider - 🏆 729. / 51 Read more »