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– Andrew Macken
As 2024 came to a close, investors were bombarded with headlines warning of an overvalued market. With the S&P 500 trading at a price-to-earnings (PE) ratio well above its historical average, many are questioning whether it’s time to take profits and derisk their portfolios. But what if the market isn’t as overvalued as it seems? What if hidden distortions are masking the true worth of some of the most ‘advantaged’ stocks, like Amazon, Meta, and Blackstone?
In our latest whitepaper Unveiling Hidden Value: How 3 Distortions Mask the True Worth of ‘Advantaged’ Stocks, Montaka Global reveals how traditional valuation metrics often fail to capture the long-term potential of innovative, high-growth companies. By examining three key distortions—R&D spending, low-capital-intensity growth, and cyclical troughs—the paper uncovers why these stocks, despite appearing expensive, may still offer significant upside. For example, Meta’s massive R&D investments in AI and virtual reality are expensed upfront, artificially depressing its current earnings and inflating its PE ratio. But when adjusted for future growth, Meta’s true valuation looks far more attractive.
The whitepaper also highlights how companies like Blackstone and Costco, often perceived as overvalued, are actually positioned for sustained double-digit growth with minimal capital investment. Blackstone’s ability to generate high returns on capital, combined with its exposure to the booming alternative asset market, makes it a compelling long-term hold. Similarly, Costco’s low-capital-intensity growth model and strong returns on incremental investments justify its premium valuation.
Finally, the paper explores how cyclical upswings in sectors like enterprise digital transformation, AI, and the US housing market are set to unlock hidden value in 2025. Companies like Salesforce, ServiceNow, and Floor & Decor are poised to benefit from these trends, offering investors a chance to capitalize on emerging opportunities.
If you’re wondering whether the market’s ‘fear of heights’ is justified, this whitepaper is a must-read. It challenges conventional wisdom and provides a fresh perspective on how to identify undervalued, high-growth stocks. Download the full whitepaper now to uncover the hidden value in today’s market and transform your investment strategy.
To request a copy of this paper please click or fill in the form below:
Note: Montaka is invested in Amazon & Apple.
