Buy Value and Small Cap Stocks Now

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Buy Value and Small Cap Stocks Now

Important point:

  • Morningstar said the strength of the so-called “Great 7” stocks is beginning to wane so it is important to look elsewhere.
  • Analysts believe that there will be an economic recession and interest rates will gradually start falling, so value companies and the Russell 2000 may benefit in this context.
  • The companies named by Morningstar include Snowflake, ExxonMobil, Entergy Corp and NiSource.

During the last year, shares were called “Fantastic 7” His performance was extraordinary. However, an expert says they are currently losing strength.

David Sequeira, head of markets at Morningstar, explained that he expects the market to continue rising but recommends holding shares “Far from the Magnificent 7”,

“With economic growth slowing but not necessarily entering a recession, and interest rates gradually coming down throughout the year, I think this is a pretty good year for value stocks. And I think the same characteristics will help the small cap category as well.

Axe.

It should be made clear that Russell 2000 The US small-cap index is down 3.5% so far this year, while S&P 500 He Dow Jones And this nasdaq They have recovered and are trading profitably.

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In any case, strategists are convinced that small-cap and value stocks “nice area” To buy at this time, because they” are quoted with Discount,

Small-Cap Value Stocks Morningstar Recommends

Technology section

Sequeira mentioned only two companies in this industry to consider: snowflake Famous on Wall Street, and Cognizant Technology Solutions,

Energy segment

,In fact, we are now starting to see values ​​in the energy sector that we have not seen in quite some time“, the strategist stressed.

In that sense, he named ExxonMobil this APA Corporation Clarifying that these actions are “not correct assessment,

Public services

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Finally, he mentioned three companies in the sector that are off by about 9%: Entergy Corporation, fresh source this WEC Energy, Furthermore, he indicated that these companies have suffered huge losses due to rising interest rates.

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