News. (Reuters) - European companies in industries with low growth prospects such as airlines, retailers and utilities are set to seek more cost cuts to sustain profits and reassure investors in the absence of a strong economic recovery.
Valuations of companies have dropped as if an economic downturn was imminent, Thomas Teetz, equity strategist at HSBC said, and companies will have to attend to that greater nervousness amongst investors.
My point. PE ratios are likely to settle to much lower levels to reflect a slow growth economy -- and earnings -- in the next few years.
Could they go down to 5-10% instead of the much touted average of 16%? It would have major implications for our investment strategy.
George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest
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