Author believes the era of inflated valuations and speculation has hurt traditional value investing. In a market that re-rates lower, cheaper value-oriented stocks should outperform expensive growth/momentum names. Long value equities as a relative play on mean reversion and traditional value investing regaining favor. Value can remain cheap for years; growth could continue outperforming; no catalyst for rotation.
Author believes the era of inflated valuations and speculation has hurt traditional value investing. In a market that re-rates lower, cheaper value-oriented stocks should outperform expensive growth/momentum names. Long value equities as a relative play on mean reversion and traditional value investing regaining favor. Value can remain cheap for years; growth could continue outperforming; no catalyst for rotation.
LULU trades near 11x forward earnings with international/China growth and a new Nike-experienced CEO. Cheap valuation combined with growth catalysts and a 50-day MA reclaim could attract re-rating. Long LULU as a value/growth turnaround based on valuation, momentum, and leadership change. Weak moat, fashion cyclicality, deteriorating quality, and strong competition could invalidate the bull case.
LULU trades near 11x forward earnings with international/China growth and a new Nike-experienced CEO. Cheap valuation combined with growth catalysts and a 50-day MA reclaim could attract re-rating. Long LULU as a value/growth turnaround based on valuation, momentum, and leadership change. Weak moat, fashion cyclicality, deteriorating quality, and strong competition could invalidate the bull case.