"An "October Surprise" is usually a significant, late-breaking news event that generally occurs just before a November election and has the potential to influence its outcome. These events can be intentional, such as a planned political attack, or unexpected, like a major news story that emerges spontaneously. While there is no election this year, the big financial "October Surprise" is that fund flows are starting to indicate a rotation from large-cap growth stocks to value."
"A value stock is generally a company that trades at a price lower than its fundamental value or what its performance suggests it should be worth. Typically, these are shares of a company with solid fundamentals that are priced below those of its peers, based on an analysis of the price-to-earnings ratio, yield, price-to-book value, and other relevant factors. Value stocks are often overlooked by the market or undervalued due to factors such as market volatility, economic downturns, or negative news surrounding the company, which may be temporary in nature."
Fund flows are beginning to rotate from large-cap growth stocks to value stocks as major indices reach weekly all-time highs. Investors still favor technology companies, particularly those tied to AI, but recent flow patterns are shifting capital toward value. Value stocks trade below assessed fundamental value using metrics like price-to-earnings, yield, and price-to-book ratios. Undervaluation often results from market volatility, economic downturns, or temporary negative news. A screen of a large-cap value research database identified five dividend-paying stocks rated Buy by top Wall Street firms, combining income, safety, and upside. Since 1926, dividends have contributed about 32% of S&P 500 total return.
Read at 24/7 Wall St.
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