Neil Hennessy said investors need to look at value stocks that offer attractive price-to-sales multiples and avoid what he sees as a dying Magnificent 7 trade. The Hennessy Funds CEO said buying the Magnificent 7 , the group of mega-cap tech stocks credited with driving the market higher for the past year and a half, is no longer smart after their monster runs led to exorbitant multiples.
"The reality of our world is money is shifting over to value," said the University of San Diego alum. "Where the euphoria is in AI and crypto. And I'm not sure you really want to be there." .SPX OSK,GPI YTD mountain The S & P 500 vs. Oshkosh and Group 1 For investors interested in value, Hennessy said one of the most important numbers to look at is price of the stock to sales. As a general rule, Hennessy said he wouldn't pay more than $1.50 for $1 in sales.