Justin Lowry on Why Growth Valuations Matter for FactSet

Global Beta’s Justin Lowry recently wrote an article about growth valuations for FactSet, an investment data and software solutions company. In it, he explores current valuation risks that can leave investors in growth-oriented securities vulnerable to losses when the market inevitably corrects.

Lowry notes that as of August 31, 2020, there were twice as many securities (48) in the S&P 500 Growth Index with price-to-sales multiples of 10 or greater than there were on December 31, 1999 (24). He suggests that many of these companies will experience headwinds as the economy recovers, the pandemic is eradicated, and competition increases once again. The result: a reallocation in the stock market and a correction in overbought names.

Learn more about Lowry’s predictions and Global Beta’s strategies in the article here.