The Goldman Sachs technology M&A team, led by Sam Britton, has cashed in on its software focus and decades of experience to dominate 2019's biggest deals.Technologyread more
American small and medium-size companies that rely on China are scrambling to adjust their business plans in response to the escalating trade war.Traderead more
Here are the products that stand to be the most affected by China's new tariffs on $75 billion worth of U.S. goods.Marketsread more
The summit comes amid fears over a global economic slowdown, and U.S. tensions over trade allies, Iran and Russia.Politicsread more
The world's second biggest economy is past a point where it cannot ignore its enormous debt anymore, according to an analyst.China Economyread more
Carl Medlock used to work at Tesla. Now he's one of the few people in the U.S. that can fix the company's original Roadster electric vehicles.Technologyread more
Trump does have some powerful tools that would not require approval from U.S. Congress.Politicsread more
Stocks dropped after Donald Trump ordered that U.S. manufacturers find alternatives to their operations in China.US Marketsread more
As demand for lab monkeys continues to rise, U.S. scientists are reporting delays in research projects because they can't obtain enough animals, according to the National...Politicsread more
The European Union will respond in kind if the U.S. imposes tariffs on France over digital tax plan, EU chief Donald Tusk told G-7.Technologyread more
Trump said he will raise tariffs on $250 billion in Chinese goods to 30% and hike duties on another $300 billion in products to 15%.Politicsread more
Nygren said Thursday he thinks investors could be missing out on two big value plays if they just look at their price-to-earnings multiples, which are widely followed measures of stock valuations.
“You hear people talk about excessive valuations on the FANG stocks. We’re value managers and we own Facebook. Facebook, on next year’s earnings estimates, is barely at a market multiple,” Oakmark’s Nygren told CNBC’s “Halftime Report.”
“We (also) own Netflix. Netflix is adding 20 million subscribers this year that we believe are worth $1,000 per subscriber,” Nygren added. “If you think about the market cap relative to the value that they’re adding, it’s about 11 times. So to us, the argument of it being 200 times earnings or some silly number like that just shows how bad the accounting is; it doesn’t show that the stock’s overvalued.”
Netflix is one of the best-performing stocks this year, having risen 91 percent in 2018. Facebook, meanwhile, is up nearly 20 percent year to date. Both stocks are outperforming the S&P 500 for the year, which is up 5.1 percent.
However, their valuations have raised concern that they may be too expensive. Facebook’s trailing price-to-earnings ratio was around 34.5 on Thursday, while Netflix’s was near 170. Meanwhile, the S&P 500’s price-to-earnings ratio was just under 22.
Nygren joined Harris Associates, the investment advisor for Oakmark Funds, in 1983. He manages the firm's Oakmark Investor Fund, which has $21.1 billion in assets. His fund has outperformed the S&P 500 over the past 10 years and since inception through June.
The portfolio manager also said he bought shares of Bristol-Myers Squibb, Hilton Worldwide and Gartner to his portfolio during the second quarter.
Nygren said Bristol is “an attractive long-term hold” given its strong pipeline of products and heavy investments in its oncology franchise. He also said Hilton is “now almost entirely a royalty stream of income that grows with the amount of stays at their hotels.”
He also said Gartner actually has an attractive valuation despite sporting a price-to-earnings ratio above 30. “That’s just a case of GAAP accounting not doing a good job of handling expenses that have very long-term benefits yet get expensed immediately.”