We expect value stocks to outperform the S&P 500.
DVMT is a tracking stock of VMware.
VMware is a top quality stock that is not incredibly cheap, but DVMT’s discount versus VMware makes DVMT good value for money.
Earnings and price momentum is positive.
Time for value?
I’m not telling something new when I say that the US stock market is not cheap. The numbers in Exhibit 1 speak for themselves.
Exhibit 1: Worldwide valuations
This leaves US equity investors two options:
- Invest in foreign stocks and/or
- Invest in US value stocks.
According to Franklin Templeton, there’s a strong historical relationship between value and non-US equities. Over the past two decades, non-US stocks have tended to outperform US stocks when value starts to work. Today, we talk about a neglected US value stock: Dell Technologies (NYSE:DVMT).
Dell, EMC, VMware and a tracking stock
The site Visual Capitalist recently posted a visual about the Early Business Pursuits of Bezos, Buffett, and Other Legends. One of those other legends was Michael Dell, the founder of Dell Computer Corporation.
Exhibit 2: the Early Business Pursuits of Michael Dell