For us, valuation is a very important part of our investment philosophy. But finding companies trading below our estimate of their intrinsic valuation has become more challenging as the US stock market marches to all-time highs.
One sector where we continue to see considerable opportunity is the energy sector. In fact, using analysis from Citigroup, it is the only sector in the US market that trades below its ten-year price-to-book average. There is good reason to be excited about the sector prospects. Inventories are drawing at a decent clip, eliminating the excess. OPEC has extended its cuts well into 2018 as it looks to help rebalance the market. Overall, oil demand is strong as we feel the immediate worries over the impact of electric vehicles are overstated and emerging market growth is robust. Invesco P...
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