(August 2020)

Are you worried that FAAMG stocks might see a correction which causes underperformance of your clients’ portfolios? Many are. With that in mind one idea is to look at financial funds, and particularly midcaps, to find some outperformance. Financials, like many other sectors, have lagged the performance of the handful of sectors that have thrived recently, but interestingly, there are some very good buys available. We mean there are many stocks with solid fundamentals, decent recovery pictures, and P/E ratios from 3x to 8x. One particularly good area is in midcap financials, where you encounter insurance companies, asset managers, and lenders that have strong underlying businesses, but are currently out of favor.

(New York)

FINSUM + Magnifi: There are a lot of good stocks to be had in this midcap financial area. Take Brighthouse (a spin-off from Metlife), for instance. The company has solid fundamentals and trades for 20% of book value right now (4x earnings)

 

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