Growth stocks surged past value stocks in 2023 and continue to generate solid returns this year, running up to levels Morningstar considers overvalued, content development editor Margaret Giles reported in a blog post this week.
Where do value stocks stand today?
“According to our valuations, on both an absolute as well as a relative basis, value stocks remain the most attractive category by style,” Morningstar’s chief U.S. market strategist, Dave Sekera, said in the post. “Not only are value stocks more attractively valued, but we think the rotation into value will pick up steam as the economy slows and earnings growth for growth stocks begins to slow.”
Morningside analysts compiled a list of the best value stocks to buy for the long term, selected from the firm’s best companies to own for 2024. Companies on this list have wide economic moat ratings, meaning that they are likely to sustain their competitive advantage for at least two decades. They have predictable cash flows, and are run by management teams that make smart capital-allocation decisions.
The stocks, which land in the value portion of the Morningstar’s style box, are cheap, trading below Morningstar’s fair value estimates.
See the gallery for the 10 best value stocks to buy now, according to Morningstar analysts. Year-to-date performance is as of Dec. 10.
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