Fundstrat Global Advisors founder Tom Lee said Monday he believes markets have reached an inflection point during which value stocks will beat out growth stocks for the near term.
"I think a few things have happened that really build the case that we're in a six-to-12-month period where value will beat growth," he told CNBC's "Fast Money: Halftime Report."
On Friday, Lee sent a note to clients explaining why value will outperform momentum stocks, and he listed his top stock recommendations.
First on the list is the steepening of the Treasury yield curve, which Lee said is a "really reliable" leading indicator of the shift in value over growth for about six months. A steeper yield curve implies growth is happening faster, which means "growth is less scarce" and value stocks should outperform, he said.
Second, Lee said he sees the dollar flattening, which will benefit value names because they tend to be more heavily exposed to international markets. A stronger dollar makes U.S. goods more expensive overseas and dilutes foreign profits when they're repatriated.
Lastly, the health care sector has slipped from its leadership position, setting up a positive historical trend for value names.
"Health care, historically, it's pretty much been your poster child for growth. As health care starts to loose its leadership, five of five times since 1990, value starts to outperform growth," Lee said.