What earnings growth really means for international stocks

While US growth may be higher, international stocks may have a value advantage, explains Harris Associates’ David Herro.

In a recent webcast hosted by Harris Associates, adviser to the Oakmark Funds, international equities experts David Herro, CFA®, CIO-International Equities and Portfolio Manager, and Justin Hance, Director of International Research and Portfolio Manager, shared their value investing insights. Video clip highlights include:
  • Why, despite greater earnings growth in the US, the pricing disparities compared to international stocks is still too high today.
  • The misnomer of what stronger growth in the US means for quality European companies that earn significant money in the US and emerging markets.
  • Tips from recent trips to Europe and Japan: value in Germany, improving profitability in Japan.
For more information, download a whitepaper from the Harris Associates international markets team for a more in-depth look at how international markets are priced today.
CFA® and Chartered Financial Analyst® are registered trademarks owned by the CFA Institute.

The information, data, analyses, and opinions presented herein (including current investment themes, the portfolio managers’ research and investment process, and portfolio characteristics) are for informational purposes only and represent the investments and views of the portfolio managers and Harris Associates L.P. as of January 22, 2024 and are subject to change and may change based on market and other conditions and without notice. This content is not a recommendation of or an offer to buy or sell a security and is not warranted to be correct, complete or accurate.

There can be no assurance that developments will transpire as forecasted. Actual results may vary.

Investing involves risk, including the risk of loss. Investment risk exists with equity, fixed income, and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided.

Investing in value stocks presents the risk that value stocks may fall out of favor with investors and underperform growth stocks during given periods.

The price to earnings ratio (“P/E”) compares a company's current share price to its per-share earnings. It may also be known as the "price multiple" or "earnings multiple" and gives a general indication of how expensive or cheap a stock is. Investors should not base investment decisions on any single attribute or characteristic data point.