Category: Fair Value

What a difference 30 days can make! Investor’s moved from an optimistic 6.2 point position above fair value neutral, to a 3.8 point position on the pessimistic side. Given the fear that is in the marketplace and predominately negative views on economic growth, I am surprised it is not further down on the pessimistic side of fair value.

Markets have reacted to the scare of the Novel Coronavirus (2019-CoV) with very little data. So far, 2019-CoV appears to be less harmful than either MERS or SARS. If we peel away the swings that appear to be created by quick reactions to the virus and concentrate on factual data such as earnings and revenues, we can see a picture where market price levels are moving slightly ahead of earnings support.

Cable ONE and Delta Air Lines increase in fair value while PNC Financial and UnitedHealth Group move lower.

As the market moves upward it appears to be well deserved because the market value is now within 1.8 points of fair value. We sometimes wonder if the overwhelming amount of “concern” that has been …

Overall fair value influence moved slightly in favor of revenues and earnings along with a slight decline in the importance of dividends. Large Cap stocks matched the overall market with slight increases in the influence of both revenues and dividends, but also experienced a 1-point increase in dividend influence. MidCap stocks experienced drops in the influence of all three areas in relationship to the total market. However, the drop in earnings influence was larger than the overall market. Small Cap moved in the opposite direction of Mid Cap with increases in all three. Earnings made the largest influence increase that exceed 1 point.