In light of several political events, which include Brexit and ongoing trade negotiations between the U.S. and China, investors can look at value screener records to identify opportunities for the second quarter.
U.S. market slips on geopolitical concerns, company earnings
Despite trading at an intraday high of 26,219.46 Thursday morning, the Dow Jones Industrial Average closed at 26,143.05, down 14.11 points from Wednesday’s close of 26,157.16 and approximately seven points lower than the five-month high of 26,150 set on Nov. 8, 2018. Top Warren Buffett (Trades, Portfolio) holding Apple Inc. (AAPL, Financial) contributed to the decline, down 0.83% from the previous close.
The U.S. market rose at the opening bell on improving trade talks between the U.S. and China. CNBC columnist Fred Imbert said the Wall Street Journal reported China agreed to “open its cloud-computing sector to foreign companies.” Despite this, investors also weighed in on news regarding the delay of Brexit: According to CNBC, the U.K. government and leaders of the European Union agreed to a “flexible extension” of Brexit to Oct. 31, provided the U.K. attends the European Parliament elections in late May.
U.S. market stays significantly overvalued while global markets remain undervalued
Buffett’s favorite market indicator stood at 142.4%, approximately 3.2% higher from April 1’s reading of 139.2%. Based on the current market valuations, the U.S. market is expected to return -2.1% per year over the next eight years.
On the other hand, the U.K. and China's markets remain undervalued, with expected returns of 8.2% and 26.3%.
Value screeners identify opportunities
Table 1 details the value screener record as of April 11.
| Screener | USA | Canada | UK | Europe | Asia | Oceania | Latin America | Africa | India |
| Graham Net-Net | 246 | 58 | 58 | 263 | 613 | 9 | 8 | 16 | 41 |
| Undervalued Predictable | 63 | 6 | 41 | 124 | 64 | 6 | 50 | 6 | 12 |
| Buffett-Munger | 33 | 4 | 27 | 99 | 92 | 0 | 30 | 3 | 44 |
| Peter Lynch PE | 29 | 1 | 16 | 43 | 56 | 0 | 5 | 4 | 5 |
| Peter Lynch PS | 116 | 6 | 50 | 166 | 80 | 6 | 33 | 24 | 39 |
| Peter Lynch PB | 162 | 24 | 72 | 227 | 104 | 8 | 45 | 26 | 61 |
| Lynch p2ebitda | 216 | 9 | 63 | 272 | 111 | 7 | 30 | 19 | 50 |
| Hist Low PS | 31 | 1 | 14 | 44 | 39 | 0 | 17 | 6 | 26 |
| Hist Low PB | 57 | 2 | 27 | 78 | 43 | 2 | 31 | 10 | 25 |
| High Div Yield | 59 | 7 | 9 | 94 | 43 | 15 | 25 | 6 | 4 |
Table 1
As we observe in Table 1, the Asia region still has over 600 Benjamin Graham net-nets, suggesting possible market undervaluation.
Premium members have access to all our value screens, including the All-in-One Screener. Other key features include the Aggregated Portfolio of Gurus and GuruFocus Real-time Picks.
Disclosure: No positions.
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