Top Picks: Value in Focus

Value investing seems to be experiencing a moment of renewed opportunity. “One of the exciting things about the opportunity set for value investing today is how broad-based it is,” says Bill Nygren, CIO-US and Portfolio Manager at Harris | Oakmark, noting that “if you move away from technology, most everything in the market looks unusually attractive.”

Beyond traditional value areas, such as financials or oil and gas, Nygren says he's also eyeing opportunities in sectors like media, technology, consumer nondurables, and consumer durables.

“Even today, some health care names are also starting to look attractive to us, so you can put together a pretty well-diversified portfolio and not have to pay anything like the S&P 500 multiple,” adds Nygren.

Meanwhile, the broader market continues to be shaped by powerful secular forces, including AI-driven growth and persistent macroeconomic uncertainties. Sam Peters, Portfolio Manager at ClearBridge Investments, shares more on how value stocks fared against this backdrop and some of the leading sectors in the second quarter.

“For the quarter, growth stocks beat value stocks, with the market led by double-digit returns from the information technology , communication services and consumer discretionary sectors, as well as industrials, where stocks tied to power and electrification did well,” says Peters. “Concerns over the deficit and inflation kept Treasury yields elevated and led to more modest returns for utilities and consumer staples and largely flat returns for real estate, while tariff uncertainty and geopolitical tensions capped gains for economically sensitive financials and materials stocks and drove negative returns for the energy sector,” adds Peters. “Health care also declined amid worries over tariffs on pharmaceuticals and reimbursement rates for Medicare Advantage plans.”

Reflecting on how the ClearBridge Value Strategy outperformed its benchmark in the second quarter, Peters says that “stock selection in the more defensive utilities and communication services helped overcome a detractor from our overweight to health care.”