Buy undervalued defensive stalwarts amid earnings volatility
The guest argued that investors should avoid trading ahead of volatile earnings reports and instead accumulate undervalued, high-yielding defensive stocks on weakness.
The argument
David Katz of Matrix Asset Advisors noted that the market is fully priced with high single-stock volatility around earnings, but pockets of deep value remain. He highlighted consumer staples like PepsiCo as attractive long-term holdings due to reasonable valuations and solid dividend yields.
The thesis, stress-tested
✓ What validates it
- ✓Defensive sectors showing relative strength and attracting capital inflows during broader market pullbacks
- ✓PepsiCo meeting or exceeding its revised, more conservative outlook in subsequent quarters
▸ Risks discussed
- ▸Short-term underperformance if the market's momentum trade re-accelerates at the expense of value and defensive sectors
Hear it yourself
"But on a fundamental basis, we think the market is fully priced, but there are many, many pockets of undervalue socks, and we think the key is to buy those undervalued socks with a good long term perspective. Get a lot of consumer staples like PEPSI announced startings."
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