Kenneth Andrade, Founder & Chief Investment Officer, Old Bridge Capital Management. In an interview with
Samie Modak, Andrade spells challenges in playing the ‘value’ theme. Edited excerpts:
What are your views on valuations and corporate earnings?
Earnings growth is reverting to mean. This is a good thing as it does provide a lot of cash flow to corporates to restructure their business operations. So rather than looking at earnings growth we should look at how profitability improves financial health of the business. This trend remains secularly upwards. And that is one of the reasons why markets trade at fair valuations. Given the macro-onslaught of liquidity and abnormally-low interest rates, high valuation can be sticky. That shouldn’t be the reason to get complacent about them.