Stock Market Outlook: Energy Compelling as Oil Ends Quarter Where It Began
The energy sector is the most attractive from a valuation perspective, particularly oil-services stocks.
Shares of U.S.- and Canadian-domiciled firms, which account for roughly half of our 1,500-plus global coverage, look slightly less attractive following the Morningstar U.S. Market Index's 3% climb in the second quarter to June 25. The median North American stock trades 4% below our fair value estimate versus a 5% discount near the end of the first quarter. Meanwhile, the share of 4- or 5-star stocks marginally exceeds those rated 1 or 2 stars: 30% versus 25%. The global picture is similar, with the median stock at a 4% discount and the share of "buys" exceeding that of "sells" 32% versus 26%.
Daniel Rohr does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.