Skip to content
Alpha Edge Investing

Alpha Edge Investing

"Investors operate with limited funds and limited intelligence, they don’t need to know everything. As long as they understand better than others, they have an edge.” – George Soros

  • Home
  • Earnings Updates/ Corporate Actions
  • Research – Equities
  • Research – Fixed Income/ Bonds
  • Research – Unit Trust/ ETF
  • News
  • My Opinions/ Views
  • Others
  • About Me
  • Contact
  • Disclaimer
  • Community and Support Forums
  • Toggle search form

S&P500: Possible Entry for Investors

Posted on February 28, 2022March 1, 2022 By alanyeo No Comments on S&P500: Possible Entry for Investors

We have seen the US market pulling back heavily, especially the NASDAQ since the turn of the year. On February 23, the closing price for the S&P 500 was 4225.50 and the forward 12-month EPS estimate for the index was $228.85. Based on this closing price and EPS estimate, the forward 12-month PE ratio for the S&P 500 on that date was 18.5. 

This is the first time that the forward 12-month PE ratio was below the 5-year average of 18.6 since the 15th of April 2020 (the start of the Covid Crisis).

From the above, we see that the valuation of the S&P has in fact retraced back to 2020 level in terms of forward PE, right at the beginning of the Covid crisis.

Economic condition pre-covid was different compared to what we are seeing in the economy today. Of course we had the US central bank injecting record liquidity to prevent a recession from happening as a result of the pandemic. Earnings grew for most of the US companies during the pandemic crisis as well with more than 70% of the S&P companies beating estimates in 2021. Big tech companies are sitting on ample cash.

Some risks that I am seeing now is of course, the expectation of a slowdown in the US economy, a hawkish FED, inflation, and geopolitical risk (ongoing war in Ukraine).

This might be a good opportunity for longer term investors to position into the markets.

https://alphaedgeinvesting.com/about/

Share this:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to share on Telegram (Opens in new window)
  • Click to share on WhatsApp (Opens in new window)
My Opinions/ Views Tags:Market outlook, us market, US Strategy

Post navigation

Previous Post: KE: Hock Seng Lee – HOLD TP RM1.35
Next Post: KE: SP Setia – HOLD TP RM1.42 (Previous RM1.43)

Related Posts

Are We Near the End of the Current Bear Market? My Opinions/ Views
DBS Weekly: All Eyes on US Midterm Elections Research - Equities
DBS: CIO Insights 4Q22 – Fed in Focus Research - Equities
Post FOMC Meeting Commentary My Opinions/ Views
Better late than never! Tighter financial Condition Slowing Growth My Opinions/ Views
Market Make or Break (Sep 2022): Toilet Talk – Q2 2022 Reporting Season My Opinions/ Views
Edge: What is stagflation, and why is it such a worry now? News
Edge: BofA survey shows full investor capitulation amid pessimism News
Investing in a Stock Market Crisis – A U-shaped Recovery My Opinions/ Views
Morgan Stanley: Is now the time to buy the market bottom? Research - Equities
Inflation to the moon! What to do for investors? My Opinions/ Views
Bloomberg: BlackRock warns against dip buying as high-volatility era dawns News

Leave a Reply

You must be logged in to post a comment.

Login

Log In
Register Lost Password
Get new posts by email
Chat on WhatsApp
  • Earnings Updates/ Corporate Actions
  • My Opinions/ Views
  • News
  • Others
  • Research – Equities
  • Research – Fixed Income/ Bonds
  • Research – Unit Trusts/ ETF

Copyright © 2023 Alpha Edge Investing.

Powered by PressBook Grid Blogs theme