As September unfolds, it’s crucial to note that this month often ranks as one of the most challenging for equities historically.
One key ratio I’m monitoring right now is the performance of technology stocks (NYSE:) relative to the , which has recently climbed back to levels seen during the dot-com bubble.
Why does this matter? Technology stocks make up over 30% of the S&P 500, and for the first time in over two decades, this ratio has hit the March 2000 highs, just before the tech crash.
Currently, the market is respecting these levels, with technology stocks lagging and falling to new 52-week lows compared to the S&P 500.
Could Value Stocks Be the Next to Shine?
Since June, the bullish market has been driven by large-cap technology stocks, which led to a swift market expansion and a shift in leadership. Could value stocks be the next to shine?
Indeed, the market’s expansion has spurred momentum in value stocks. The Vanguard Value Index Fund ETF (NYSE:), for instance, has reached new all-time highs this year, with a +15.6% return (excluding a +2.29% dividend yield).
This Value ETF focuses on large-cap stocks, and its top 10 holdings include:
Broadcom (NASDAQ:)
Berkshire Hathaway (NYSE:)
JPMorgan Chase & Co (NYSE:)
Exxon Mobil Corp (NYSE:)
UnitedHealth Group (NYSE:)
Johnson & Johnson (NYSE:)
Procter & Gamble Company (NYSE:)
Home Depot (NYSE:)
AbbVie (NYSE:)
Walmart (NYSE:)
We’ve added the 10 value stocks that could push this ETF to new highs to our Pro Watchlist.
Analyzing these stocks using InvestingPro’s tools, Broadcom stands out. Despite a 29.6% expected rebound, InvestingPro’s Fair Value suggests the stock is currently fairly valued.
Broadcom is nearing previous highs, and while uncertainty remains short-term, its Health Score—an indicator of financial health—reflects a strong performance, earning a 4 out of 5.
Analysts forecast a 43.4% sales growth for Broadcom this year, outpacing competitors. This anticipated growth could signal increased profitability and a higher share price, which is a positive sign for investors.
Moreover, Broadcom has…
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