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August Market Valuation Update

August Market Valuation Update

Posted August 6, 2024 at 9:41 am
Validea Capital Management

Here is the latest update for August from Validea’s market valuation tool. Rather than focusing on market-cap weighted indexes like the S&P 500, our tool focuses on the valuation of the average stock relative to history. We use the median of our investable universe of 2700 stocks to perform the calculation.

The big run in small-cap stocks in July led to a pretty big increase in the median PE ratio. The median PE rose from 20 to 21.5 for the month and went from average to above average historically. It is now in the 67th percentile.

Source: Validea

Using current year earnings estimates, valuations rose in a similar fashion.

Source: Validea

The Price/Sales is the one metric where the median stock looks very expensive. It rose from the 70th percentile in July to the 85th percentile in August.

Source: Validea

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Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

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