subject: Barvetii High Potential In Us Blue Chips. [print this page] Barvetii Now is an ideal time to buy into US equities, according to the Spanish-based wealth consultants.
Barvetii points out that US blue chips are at their cheapest levels to bonds since 1951 and believes this represents an enormous opportunity for investors. US large cap stocks represent a great opportunity to buy the best quality companies in the world at extraordinarily low prices.
Exxon Mobil is a prime example of a undervalued but quality business. Earlier this quarter the stock hit a year low and was trading lower than it was during the financial crisis of Autumn 2008.
Exxon has a yield greater than the 10-year Treasury bond, trades at a multiple well below the market, has returns on capital above the market, and has grown the dividend over 9% per year for the past five years, said Barvetii
In sharp contrast, five year Treasury bonds are trading at their lowest yields in history, while 10-year Treasuries are yielding 2.93%.
Despite all these factors, Barvetii points out that investors are seemingly not showing much in the way of logic. What they want is Treasuries and what they dont want is Exxon Mobil and other US stocks with similar characteristics.
Barvetii believes now is a time to invest in quality stocks when they are unloved and at extremely attractive valuations. Investors should keep an eye on financial stocks for indications as to whether expectations are being priced in. Financials tend to lead the market, both on the upside and the downside. They have been market leaders off the bottom in March 2009, and they peaked in 2007 well before the market.
