Tuesday, September 26th, 2006
IBD on growth stock revival
Investor’s Business Daily has a good summary of the revival of growth stocks. It notes that growth stocks have underperformed for most of this year, just as they have every year since 2000. “The tables turned slightly in September. The Russell 1000 Growth gained 2.4% from Sept. 1 to Sept. 20, beating the Russell 1000 Value’s 0.9% rise,” it said. “Techs have picked up some steam, while oil and metals stocks have retreated.”
But the article makes an interesting point that sector weightings have impacted relative returns from value and growth:
” ‘Sector weightings have a lot to do with the disparity, though. Energy stocks, which have made a big run in recent years, make up 13% of the Russell 1000 Value and only 3% of the Russell 1000 Growth,’ notes David Chalupnik, head of equities at Minneapolis-based FAF Advisors.
“Tech and health care take big positions in the Russell 1000 Growth at 24% and 18%. Large caps in both sectors have lagged, while smaller, younger firms have flourished. ‘Large pharmaceutical companies just aren’t the growth names they used to be, and medical device firms have dealt with a lot of product recalls,’ Chalupnik said.”
Below are some previous Global Growth Investor posts on the long-awaited revival of growth stocks:
Shift from value to growth not far off
A renaissance of growth stocks
Growth stocks badly mispriced
Hedgehogg Biggs says growth cheap
10 fallen growth stock gems
Word Count: 226. This entry was posted on Tuesday, September 26th, 2006 at 7:20 pm and is filed under Value Versus Growth. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
