Long-time value investor Bill Nygren is warning that the popular benchmark S&P 500 is no longer as diversified as it once was and he’s picking cheap stocks outside of the dominant technology sector. Nygren, a portfolio manager at Oakmark Funds for 40 years, said technology is so strong in the S&P 500 that about 25 of the largest companies account for half of the investments. “It’s not as diversified as investors think,” Nygren said on CNBC’s “Money Movers.” “I think we’re going to see investors revisit the idea of ​​the S&P 500 as a low-risk way to invest in stocks. The large-cap benchmark has rallied about 20%, driven by a handful of big tech names like Nvidia and Meta Platforms, to hit consecutive record highs, Nygren said. The negative bias toward stocks prompted him to look for companies with cheap shares that had large buyback programs so that the stock price would appreciate on its own without other investors following suit, Nygren said. “That became so important to us. , so much so that we invest in companies that take matters into their own hands and use excess capital to buy back their own stock. He has highlighted Corebridge Financial, a $15 billion retirement services and life insurance company that was recently spun off from AIG, in his portfolio. Corebridge is trading at about $28 a share, and Nygren expects it to be worth $28 a share by the end of 2025. , the stock would have a book value of $50, or a price-to-earnings ratio of four to five times. The investor said the company could buy back 20% of its shares every year. “Not many people know this name,” Nygren said. “They don’t have to rely on other investors to recognize the value. They just keep reducing the flow.”
ABOUT US
Our news website delivers comprehensive coverage on US news, economy, politics, and world events, ensuring you stay informed on the latest developments. We provide timely and accurate news to keep you updated on the most important stories. Stay connected with us for in-depth analysis and breaking news from around the globe.
Contact us: contact@realtimeheadlines.com
© Real Times Headlines - 2024 | All Rights Reserved