Oakmark’s Bill Nygren Talks Value

“Value is relative to something else,” says Bill Nygren when asked where to find it in today’s market. Manager of the Oakmark Select Fund since 1996, Nygren offers his perspective in a recent interview with Investment News. “In a period when you have short-term investments such as Treasuries with zero risk that pay zero, an average-risk equity that’s paying more than 2% a year in dividends and growing earnings 5% to 6% a year…. that’s a pretty attractive holding.” As far as where to find it, Nygren identifies the banking sector as “unusually attractive.” Banks, he says, are selling for […]

Bill Nygren on Value Investing, the Attractiveness of Financials, and Learnings from Different Perspectives

Noted mutual fund manager Bill Nygren of the Oakmark Select fund thinks that long term equity investors can “expect a mid- to upper-single digit minimum return in the market” looking ahead, but notes that tilting one’s portfolio to large cap financials (Citigroup, Bank of American and JP Morgan are all in Nygren’s top 10 holdings) could help produce better returns than the market. Banks, Nygren believes, will benefit once interest rates increase. As rates rise, deposit rates should increase and interest charged by banks for loaning out money also should go up, both helping the earnings power of financials. Nygren also […]

Nygren: Relax, and Rebalance

Much of the speculation about the reason for the market’s recent plunge has been that investors are downright scared about China’s slowing growth. But top mutual fund manager Bill Nygren says the sort of correction we’ve seen recently is simply a part of life when you are investing in stocks. And from a long-term investing perspective, he does not think China’s slowdown will have as big an impact as many believe. “I think sometimes we just forget that the market doesn’t really need a reason to have a 10% correction, which we basically had over the past four trading days,” […]

Nygren on the Value in Financials

Top fund manager Bill Nygren says he’s continuing to find the best value in the market in the financial sector. While the much-maligned sector isn’t the sexiest right now, Nygren says that doesn’t matter to him. What does matter is value. “We own the financials because they are the cheapest stocks with the highest quality management,” he told CNBC. “We don’t wake up in the morning thinking we want to put money to work in boring industries. But when you see valuations that are less than book value, less than 10 times earnings, to us that looks really, really attractive […]

Nygren Talks Value, Opportunity, And The End Of QE

Worried about the end of quantitative easing? Top fund manager Bill Nygren isn’t. In an interview with MoneyLife’s Chuck Jaffe, Nygren says that his firm’s five-year-holding-period, value-focused, bottom-up approach means that the exact timing of the tapering of the Federal Reserve’s bond-buying program “ends up not really being an important factor,” adding, “We certainly think the markets can handle it.” Nygren says his firm tends to go into areas where there is controversy today, but where five years down the line normalcy should return. Today he sees opportunity in financials and some cheaper tech stocks. “Our expectation is that, over […]

Nygren Talks Value

Bill Nygren, whose Oakmark Select fund is in the top 2% of its peers over the past 5 and 15 years, recently talked with CNBC about his approach and some of his favorite current stocks. “When you’re a long-term value investor like we are at Oakmark, we end up buying things that had been disappointing for others,” he said, discussing why his fund owns beaten-down Qualcomm shares. He also talks about some of his fund’s big financial holdings, including Bank of America and CapitalOne.    

Two Gurus High on Bank Stocks

Five years after the collapse of Lehman Brothers sparked the financial crisis, many investors still don’t trust bank stocks. Top fund managers Bill Nygren and David Ellison think that is part of why it’s time to buy them. “The stocks are still low because investors don’t trust that the earnings will recover fully,” Ellison tells Renal and Urology News. (An odd source, we know, but they have a solid ‘Money’ section.) He notes that bank stocks are trading at about 110% of book value, on average, well below the 180% levels seen in typical bull markets. He thinks we are […]

Buyback Stocks or Dividend Plays? Nygren Weighs In

When companies put cash to work to increase shareholder value, it can be a very good thing. But top fund manager Bill Nygren says certain types of cash deployers are looking more attractive than others right now. “One of the things we think investors have gone a little excessive on is bidding up companies that pay high yields, good income generators,” he recently told CNBC in discussing high-dividend stocks. “And we think it’s interesting that companies that have been large share re-purchasers — effectively, it should be the same to an investor whether the money comes back as money or share repurchasers. […]