Latest news with #Morningstar
CNBC
3 hours ago
- Business
- CNBC
Novo Nordisk's stock plunge isn't surprising. Why companies clear the deck for new CEOs
Novo Nordisk shares nosedived on the day its new chief executive, Maziar Mike Doustdar, was appointed. But that shouldn't have come as a surprise to investors. Minutes before the news of Doustdar's appointment on Tuesday, the Danish pharmaceutical giant reported a profit warning, slashing its operating profit growth by around a third to the new normal of 10% to 16%. It also forecast slower-than-expected top-line growth. The company appears to have attempted to clear the deck for its new CEO, but far from being a unique strategy to reset expectations with investors, it has now become a "pretty common practice," according to Michael Field, Europe market strategist at Morningstar. Field said that companies do this to "give the new CEO a chance to succeed and hit the ground running, without having to deal with quarterly profit warnings for a year or more after they join." "If they can 'kitchen sink' earnings around the CEO appointment, then the new CEO should be quickly able to show improvement in the business, which is good for everyone involved, and of course, the share price," he added. Other Stoxx Europe 600 index companies have exhibited similar strategies. A tried-and-tested technique For instance, on June 9, Swedish medical device maker Elekta announced the appointment of its new CEO, Jakob Just-Bomholt. The following day, the company released the results of a "proactive" review to "improve the quality" of its orderbook, which showed that it was about 4.9 billion Swedish krona ($503.7 million) short of its previous estimate. The stock fell 4.7% — the biggest drop since April's U.S. tariff-related volatility. "A new CEO was announced yesterday, but the investor update on Tuesday brought some further surprises that one might normally have expected to be announced at a later date," said JPMorgan analyst David Adlington on June 10. "We note that one option for the new CEO to generate renewed investor interest could be to rebase the guidance." IT software and service company Tietoevry did the same on July 21. Endre Rangnes, who had been interim CEO since May, was officially confirmed as chief executive and President. The following day, the Finnish technology company reported its interim half-year report, which said organic growth would go into reverse by 4%. "While we can recognize our strengths and achievements, we have not succeeded in delivering adequate financial performance and have suffered from lack of growth over an extended period of time," Rangnes said in his second communique to investors as chief executive. The stock dropped 13% on the day. The automaker Renault also pulled off the tried-and-tested technique on July 15. Instead of making a dedicated alarmist filing, the company lowered its profit forecast for the year during its scheduled half-year results. It did, however, announce Duncan Minto as interim chief executive officer five minutes before its earnings. In Renault's case, the automaker had announced its new strategy only a month earlier under its former chief executive Luca de Meo, who abruptly exited the company to lead ailing luxury goods maker Kering . Renault's stock, which had already been bruised by the shock exit of its former CEO a month earlier, fell another 18.5%. The stock market is littered with many such examples of chief executive appointments that are immediately surrounded by profit warnings. "The CEO themselves may advocate for this as a condition of them joining," Morningstar's Field said. "Instead of uncovering mess after mess, the new CEO may simply ask the board to fully evaluate the business ailments beforehand and allow them a fresh start." 'Every situation is different' Yet, investors have been unable to model the behavior and look past efforts by companies to reset. Why? "Mainly because every business situation is different," Field said. "There are no hard and fast rules, which makes it tough for investors to know how much bad news has already come out, or when there is more to come." The case for "buying the dip" in the stock price on such supposedly predictive behavior from companies has also been challenging. "If a CEO is really clearing the deck, then there is likely a lot of bad news already priced in to the shares as a result," Field said. "That said, every situation is different, and investors really need to assess if a change of leadership can actually fix the business or if there are structural issues that will continue to lead to worsening results." Woes with Novo Nordisk's share price are well understood among investors. The stock had declined by more than 60% since its all-time high in June 2024 on disappointing topline growth of its blockbuster weight loss drugs. Perhaps the reset in guidance from Novo was warranted, since investors punished its U.S. competitor Eli Lilly too, sending its shares lower by 5.6%.
Hindustan Times
6 hours ago
- Business
- Hindustan Times
PNB MetLife Launches Value Fund: Build Long-Term Wealth Through Value Investing
New Delhi [India], July 30: PNB MetLife Launches Value Fund: Build Long-Term Wealth Through Value Investing Value investing is a time-tested investment approach that focuses on identifying fundamentally strong companies available at attractive prices. By buying into quality businesses that are temporarily undervalued due to factors like market neglect or cyclical downturns, investors aim to benefit as the market eventually corrects the mispricing. With the launch of the new PNB MetLife Value Fund at an NAV of ₹10, investors now have an opportunity to participate in this proven strategy through a research-backed, actively managed fund designed to deliver long-term capital growth. PNB MetLife Value Fund is now open for investment and the final allocation date is July 28, 2025. Benefits of the PNB MetLife Value Fund 1. Long-Term Wealth Creation: The fund's core strategy is to invest in undervalued companies with solid fundamentals. Over time, as the market corrects its mispricing, investors stand to gain from both price appreciation and earnings growth. 2. Active Fund Management: Unlike passive funds, this actively managed fund, guided by expert research and market insights, aims for higher long-term returns. This strategy is driven by a fund management team with a proven track record, reflected in 99% of PNB MetLife's equity funds AUM receiving 4 or 5-star Morningstar ratings. 3. Outperformance Potential: The Nifty 500 Value 50 Index has significantly outperformed the Nifty 50, delivering a 5-year CAGR of 39.51% versus 20.29% as of May 31, 2025, demonstrating the potential of a value-driven approach. 4. Sectoral Opportunities: The fund benefits from exposure to currently undervalued sectors like Energy, Financials, Commodities, and Power, many of which are trading below their historical P/E ratios and offer attractive entry points. 5. Ideal for the Current Environment: With interest rates softening and the earnings outlook improving, the timing is ideal to enter a value-focused strategy that can effectively capitalize on market inefficiencies. 6. Added Protection and Tax Efficiency: When availed through PNB MetLife ULIP Plans, the fund offers life cover of up to 10 times the annualized premium, along with tax-free maturity benefits (applicable if annual premiums do not exceed ₹2.5 lakhs, as per current tax laws). Who Should Invest? Value Fund can be considered by investors who: Understand the concept of value investing and believe in it Have patience to wait till the company unlocks its true worth and its stock price to realize its true value Are comfortable taking risks for potential high returns in the future The new fund is available with PNB MetLife Unit Linked Insurance Plans (ULIPs), offering a seamless experience across both the PNB MetLife official website ( and offline distribution channels. Disclaimer: IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER. The unit linked insurance products do not offer any liquidity during the first five years of the contract. PNB MetLife Value Fund (SFIN: ULIF03615/07/25VALUEFUNDS117) is an actively managed fund. The fund aims to generate long-term capital appreciation by actively investing in companies which are attractively valued. The companies that the fund seeks to invest in would typically have lower earnings or book value multiple relative to either broader markets, their comparable peers, or their own history. The relative valuation-based strategies are best suited for individuals with very high risk tolerance and long-term investment goals UIN details of ULIP offerings: PNB MetLife Smart Goal Ensuring Multiplier UIN: 117L139V01 PNB MetLife Goal Ensuring Multiplier UIN: 117L133V07 PNB MetLife Smart Platinum Plus UIN: 117L125V06 PNB MetLife Term with Unit Linked Insurance Plan UIN: 117L136V04 PNB MetLife Mera Wealth Plan UIN: 117L098V08 Disclaimer: This article is sponsored content curated by HT Syndication. The inputs and details accounted for in the article do not necessarily reflect those of HT, and HT does not endorse or assume any responsibility for the information provided. Want to get your story featured as above? click here!
Al Arabiya
a day ago
- Business
- Al Arabiya
Why value investing has worked better outside the us
I recently interviewed investor and author Daniel Rasmussen for The Long View podcast where he commented that value hasn't worked in the US, but it's worked fine internationally. I was intrigued by this observation. So I looked at Morningstar's indexes. Sure enough, value investing has prospered beyond American shores–this year as well as over the past three-, five-, and 10-year periods. Magnificent Seven vs. Granolas US stocks of all styles have beaten international stocks for years due to a strengthening dollar, superior returns on invested capital, and expanding price multiples. Morningstar's US growth index is dominated by the Magnificent Seven. But internationally, the scale is far smaller. There is not a single public company outside the US currently worth $1 trillion. There was a time when the Granolas stocks were being promoted as Europe's answer to the Magnificent Seven (names like GSK, Roche, Nestle, L'Oreal, and AstraZeneca). But don't blame yourself if you haven't heard of the Granolas. They never really rivaled the Magnificent Seven from a performance perspective. So what has boosted value investing internationally? Largely the financial-services sector (which was lifted by higher interest rates) and energy stocks. Looking beyond Europe with style While value has outperformed growth in Europe over the past five years, Europe now represents less than half of equity market capitalization outside the US. Rather, value stocks in emerging markets (like China, India, and Brazil) and developed Asia have outperformed by an even larger margin than in Europe. The decline of Chinese internet companies, which were once big growth stocks, helps explain why value investing has triumphed over growth investing in emerging markets in recent years. On the developed-markets side, Japan has seen rising interest rates and improved economic and investment conditions disproportionately benefit financial-services stocks, which tend to reside on the value side of the market. Value's underperformance in the US: Is it macro or micro? While I have mentioned some macroeconomic factors above, I am generally skeptical of attempts to explain style leadership from the top down. Back in 2022, when sticky inflation prompted the largest interest-rate hikes in a generation, US growth stocks fell much further than value. A popular narrative arose: Growth stocks are more sensitive to interest rates. But then growth bounced back in 2023 despite high rates. The Magnificent Seven and others rode a wave of enthusiasm for AI. Growth stocks thriving amid higher rates is hardly unprecedented. Between 2015 and 2018, the US Federal Reserve hiked rates several times, yet growth beat value by a wide margin. Ultimately, I agree with Rasmussen that the triumph of growth over value in the US has more to do with historically unique and rare circumstances. I've been following markets long enough to know that style leadership can be cyclical. Right now, it's value investing that's being fundamentally questioned. Value stocks have been called structurally challenged, in secular decline, and value traps. But the value side of the market has always been home to troubled companies. Value investing is about stocks that under promise and overdeliver. Perhaps the long-term cycle will turn again in value's favor. AI could be revolutionary but like the internet ahead of itself from an investment perspective. We could look back at 2025 as a historical inflection point as marking a new market regime. The problem is that these things are only clear in retrospect. It will take time to know if the rotations we've seen in early 2025 will last or if they're just head fakes.
The Hill
a day ago
- Business
- The Hill
Why value investing has worked better outside the US
I recently interviewed investor and author Daniel Rasmussen for The Long View podcast, where he commented that 'value hasn't worked in the U.S., but it's worked fine internationally.' I was intrigued by this observation. So, I looked at Morningstar's indexes. Sure enough, value investing has prospered beyond American shores—this year, as well as over the past three-, five-, and 10-year periods. 'Magnificent Seven' vs. 'Granolas' US stocks of all styles have beaten international stocks for years, due to a strengthening dollar, superior returns on invested capital, and expanding price multiples. Morningstar's US growth index is dominated by the ' Magnificent Seven.' But internationally, the scale is far smaller. There is not a single public company outside the US currently worth $1 trillion. There was a time when the ' Granolas ' stocks were being promoted as Europe's answer to the Magnificent Seven (names like GSK, Roche, Nestle, L'Oreal and AstraZeneca). But don't blame yourself if you haven't heard of the Granolas. They never really rivaled the Magnificent Seven from a performance perspective. So, what has boosted value investing internationally? Largely, the financial-services sector (which was lifted by higher interest rates) and energy stocks. Looking beyond Europe with style While value has outperformed growth in Europe over the past five years, Europe now represents less than half of equity market capitalization outside the US. Rather, value stocks in emerging markets (like China, India, and Brazil) and developed Asia have outperformed by an even larger margin than in Europe. The decline of Chinese internet companies, which were once big growth stocks, helps explain why value investing has triumphed over growth investing in emerging markets in recent years. On the developed-markets side, Japan has seen rising interest rates and improved economic and investment conditions disproportionately benefit financial-services stocks, which tend to reside on the value side of the market. Value's underperformance in the US: Is it macro or micro? While I have mentioned some macroeconomic factors above, I am generally skeptical of attempts to explain style leadership from the top down. Back in 2022, when sticky inflation prompted the largest interest-rate hikes in a generation, US growth stocks fell much further than value. A popular narrative arose: Growth stocks are more sensitive to interest rates. But then growth bounced back in 2023 despite high rates. The Magnificent Seven and others rode a wave of enthusiasm for AI. Growth stocks' thriving amid higher rates is hardly unprecedented. Between 2015 and 2018, the US Federal Reserve hiked rates several times, yet growth beat value by a wide margin. Ultimately, I agree with Rasmussen that the triumph of growth over value in the US has more to do with 'historically unique and rare circumstances.' I've been following markets long enough to know that style leadership can be cyclical. Right now, it's value investing that's being fundamentally questioned. Value stocks have been called 'structurally challenged,' in 'secular decline,' and 'value traps.' But the value side of the market has always been home to troubled companies. Value investing is about stocks that under promise and overdeliver. Perhaps the long-term cycle will turn again in value's favor. AI could be revolutionary, but, like the internet, ahead of itself from an investment perspective. We could look back at 2025 as a historical inflection point, as marking a new market regime. The problem is that these things are only clear in retrospect. It will take time to know if the rotations we've seen in early 2025 will last, or if they're just head fakes.
San Francisco Chronicle
a day ago
- Business
- San Francisco Chronicle
Why value investing has worked better outside the US
I recently interviewed investor and author Daniel Rasmussen for The Long View podcast, where he commented that 'value hasn't worked in the U.S., but it's worked fine internationally.' I was intrigued by this observation. So, I looked at Morningstar's indexes. Sure enough, value investing has prospered beyond American shores—this year, as well as over the past three-, five-, and 10-year periods. 'Magnificent Seven' vs. 'Granolas' US stocks of all styles have beaten international stocks for years, due to a strengthening dollar, superior returns on invested capital, and expanding price multiples. Morningstar's US growth index is dominated by the ' Magnificent Seven.' But internationally, the scale is far smaller. There is not a single public company outside the US currently worth $1 trillion. There was a time when the ' Granolas ' stocks were being promoted as Europe's answer to the Magnificent Seven (names like GSK, Roche, Nestle, L'Oreal and AstraZeneca). But don't blame yourself if you haven't heard of the Granolas. They never really rivaled the Magnificent Seven from a performance perspective. So, what has boosted value investing internationally? Largely, the financial-services sector (which was lifted by higher interest rates) and energy stocks. Looking beyond Europe with style While value has outperformed growth in Europe over the past five years, Europe now represents less than half of equity market capitalization outside the US. Rather, value stocks in emerging markets (like China, India, and Brazil) and developed Asia have outperformed by an even larger margin than in Europe. The decline of Chinese internet companies, which were once big growth stocks, helps explain why value investing has triumphed over growth investing in emerging markets in recent years. On the developed-markets side, Japan has seen rising interest rates and improved economic and investment conditions disproportionately benefit financial-services stocks, which tend to reside on the value side of the market. Value's underperformance in the US: Is it macro or micro? While I have mentioned some macroeconomic factors above, I am generally skeptical of attempts to explain style leadership from the top down. Back in 2022, when sticky inflation prompted the largest interest-rate hikes in a generation, US growth stocks fell much further than value. A popular narrative arose: Growth stocks are more sensitive to interest rates. But then growth bounced back in 2023 despite high rates. The Magnificent Seven and others rode a wave of enthusiasm for AI. Growth stocks' thriving amid higher rates is hardly unprecedented. Between 2015 and 2018, the US Federal Reserve hiked rates several times, yet growth beat value by a wide margin. Ultimately, I agree with Rasmussen that the triumph of growth over value in the US has more to do with 'historically unique and rare circumstances.' I've been following markets long enough to know that style leadership can be cyclical. Right now, it's value investing that's being fundamentally questioned. Value stocks have been called 'structurally challenged,' in 'secular decline,' and 'value traps.' But the value side of the market has always been home to troubled companies. Value investing is about stocks that under promise and overdeliver. Perhaps the long-term cycle will turn again in value's favor. AI could be revolutionary, but, like the internet, ahead of itself from an investment perspective. We could look back at 2025 as a historical inflection point, as marking a new market regime.
