Trimming the Fat without Losing the Muscle:
A “Healthy” Correction for the S&P?
By the end of the first quarter, fundamental analysts had become concerned that price/earnings (P/E) multiples had become very extended, showing a “pricey” bull market. The recent corrective action in the market has helped relieve this condition. The price has backed off, and the forward earnings estimates have remained stable due to continued optimism by industry analysts. This has allowed the forward P/E ratios to compress, paring back high valuations without any corresponding earnings estimate cuts. For instance, the S&P 600 Small Cap forward P/E has fallen 11% from its March 18th high.
Past performance is not indicative of future results. The opinions expressed are those of the Clark Capital Management Group Investment Team. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Nothing herein should be construed as a solicitation, recommendation or an offer to buy, sell or hold any securities, other investments or to adopt any investment strategy or strategies. This material is not intended to be relied upon as a forecast or research. All material is compiled from sources believed to be reliable but accuracy cannot be guaranteed.
Clark Capital Management Group, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Clark Capital’s advisory services can be found in its Form ADV which is available upon request.