Equities: Finding the Path to Value?

Equities: Finding the Path to Value? by Virginie Maisonneuve, Anne Gudefin

• Going forward, earnings growth and stock selection – more than multiple expansion and beta – will likely play a bigger role in driving positive returns.
• Our research has uncovered numerous examples of stocks trading below our estimate of intrinsic value – notably in Europe and various special situations.
• Investors with the capacity for deep, fundamental research and a long-term unconstrained equity strategy may be positioned to capitalize on these opportunities.

Investors are understandably apprehensive about equity valuations. On a total return basis, the MSCI World Index has nearly doubled and the S&P 500 Index has more than doubled since the financial crisis. The equity rally, from 9 March 2009 through 29 August 2014,...