Lewis Altfest’s time in a financial attention spans 7 decades. He has some difference of recommendation for investors who aren’t used to stomach-churning stock-price moves.
He founded Altfest Personal Wealth Management in 1983 after operative as a ubiquitous partner and executive of investigate Lord Abbett Co. Before that, he was an researcher for several firms, including Lehman Brothers.
Below, Altfest modifies his methodology for a shade of division holds to assistance investors continue violent markets.
From his nation getaway, Altfest, whose organisation manages about $1.5 billion for private clients, had a following recommendation for long-term investors who might have problem watchful by a bear marketplace for improved times ahead: “Bears come adult to a behind rug looking for food. We are not fearful of them. We strike on a behind window and they run away. My recommendation for immature people is don’t be fearful of a bear marketplace for stocks! It might take time for a bear to run away, though it always happens.”
When asked about a concerns of his clients this year, Altfest pronounced many “have not strike a panic mode yet,” and that it is typically newer clients who are a many shaken about a stream environment, in that rising seductiveness rates have pressured batch and bond valuations.
He remarkable that by building money balances and holding shorter-term holds late in 2021, he was positioned to take advantage of cost declines this year.
He said: “We have stayed divided from volatility,” that is reflected in a stock-screening methodology below.
When asked for an instance of an investment that has hold adult good this year, Altfest named a Lazard Global Listed Infrastructure Fund
GLIFX,
+0.19%.
Here is how it has achieved by Jun 28, with a SP 500
SPX,
-0.07%
combined for anxiety (with dividends reinvested for both):
FactSet
Altfest pronounced that for a prolonged term, he and his colleagues were meddlesome in biotechnology, “which has been strike and has a flushed future,” and general allocation, “developing markets in particular.” He mentioned a iShares Biotechnology ETF
IBB,
+0.54%
and a Matthews Asia Innovators Fund
MATFX,
-0.06%
as dual extended vehicles he and his group of investment managers have been regulating for extended bearing to those areas of a market.
Screening U.S. division stocks
Back in January, Altfest pronounced investors were “buying high.” The SP 500 began a year during a brazen price-to-earnings ratio of 21.5 — a U.S. benchmark index’s brazen P/E has declined 24% to 16.4 given then.
For many of Altfest’s clients, income is a primary objective. Over new years, this has led to a concentration on holds with appealing division yields. Even with this year’s rising seductiveness rates, a produce on 10-year U.S. Treasury notes
TMUBMUSD10Y,
3.095%
is 3.17%, that isn’t really appealing given holds miss stocks’ long-term expansion potential.
With batch prices carrying depressed so most and with a weakening economy in mind, Altfest done some changes to his endorsed initial screening criteria for division stocks. He now suggests commencement with a division produce of during slightest 3.5% (up from his prior 3%), with estimates for augmenting sales and gain by 3% to 4% (down from his prior operation of 4% to 5%).
He also wants to hang with a low-volatility strategy, with a beta of 1 or less. Beta is a magnitude of cost sensitivity over time. For this screen, a beta of reduction than 1 indicates a stock’s cost has been reduction flighty than a SP 500 over a past year.
Here’s how we screened a SP 500 for peculiarity division stocks:
- Beta for a past 12 months of 1 or less, when compared with a cost transformation of a whole index: 324 companies.
- Dividend produce of during slightest 3.5%: 64 companies.
- Estimated gain per share for 2024 augmenting during slightest 4% from 2023, formed on accord estimates of analysts polled by FactSet. Altfest suggested going out this distant given it would equivocate a exaggeration of current-year estimates from tangible EPS results. This brought a list down to 45 companies.
- Estimated sales for 2024 augmenting during slightest 4% from 2023, formed on accord estimates of analysts polled by FactSet. The estimates for gain and sales were formed on calendar years, not companies’ mercantile years, that mostly don’t compare a calendar. This final filter narrowed a list to 19 stocks.
Here they are, sorted by division yield:
Company
Ticker
Dividend yield
Expected boost in EPS – 2024
Expected boost in sales – 2024
Vornado Realty Trust
7.19%
43%
8%
Oneok Inc.
6.56%
5%
8%
Philip Morris International Inc.
4.88%
9%
6%
Walgreens Boots Alliance Inc.
4.66%
6%
4%
International Business Machines Corp.
4.65%
4%
5%
Pinnacle West Capital Corp.
4.65%
6%
4%
Federal Realty Investment Trust
4.35%
14%
7%
V.F. Corp.
4.34%
10%
7%
Realty Income Corp.
4.30%
7%
11%
Truist Financial Corp.
3.97%
10%
5%
Kimco Realty Corp.
3.93%
16%
5%
U.S. Bancorp
3.92%
7%
4%
Darden Restaurants Inc.
3.92%
11%
6%
Southern Co.
3.85%
9%
4%
Principal Financial Group Inc.
3.76%
7%
5%
Cardinal Health Inc.
3.68%
8%
5%
Digital Realty Trust Inc.
3.63%
20%
7%
Morgan Stanley
3.58%
13%
4%
Ventas Inc.
3.52%
59%
7%
Source: FactSet
Click on a tickers to start your possess investigate about any of a companies.
Click here for Tomi Kilgore’s minute beam to a resources of information for giveaway on a MarketWatch quote page.
A batch shade formed on a singular series of factors usually serves as a starting indicate for serve research. If we are meddlesome in any of a batch on a list, we should learn some-more on your possess about companies’ businesses and long-term prospects, to form your possess opinion.
More mid-year coverage:
- What’s subsequent for a batch marketplace after a misfortune 1st half given 1970? Here’s a history.
- Stagflation, reflation, soothing alighting or a unemployment — what Wall Street expects in a second half of 2022
- Stock marketplace set for misfortune half-year opening given 1932. Recession hazard will foreordain second half: Deutsche Bank
- Major bond ETFs on gait for misfortune initial half to a year on record
