Steven DeSanctis of Jefferies told CNBC on Tuesday that many large technology stocks are getting “pricey” and investors should look for alternatives in other sectors.
“At nine times revenue, 10 times revenue, it gets a little pricey, and with that any bad news will actually be a huge detriment to these stocks,” the equity strategist said, referring to technology stocks.
He recommends investors buy stocks in industrials, consumer discretionary, and materials sectors as alternatives to technology.
Steven DeSanctis, Jefferies equity strategist, told CNBC on Tuesday that many large technology stocks are getting “pricey” and there are cheaper alternatives that investors can buy now.
“At some point you have to say what is too high,” DeSanctis said, referring to tech stock valuations. “At nine times revenue, 10 times revenue, it gets a little pricey, and with that any bad news will actually be a huge detriment to
Tech stocks’ time in the spotlight is over, and investors should begin shifts to value stocks and cyclical sectors, James Paulsen, chief investment strategist at The Leuthold Group, said in a recent note.
The S&P 500’s brief Thursday correction marks “an opportunity to ‘broaden your bets'” before valuations rebound, Paulsen said.
Money supply growth surged in recent months on the back of Federal Reserve easing and the CARES Act. That trend has preceded economic expansions by 12 months in all eight recessions since 1960, according to the strategist.
The cyclical sectors that avoided bankruptcy during coronavirus lockdowns “may currently be positioned with the greatest upside profit leverage,” Paulsen said.
Still, investors should hold on to some growth positions as their fundamentals remain healthy, he added.
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The S&P 500’s brief correction opened the door for a shift to neglected corners