Gavekal Capital: 3-Month Change in EPS Growth Estimates Falling at Fastest Rate Since 2008

Tuesday, January 27, 2015

3-Month Change in EPS Growth Estimates Falling at Fastest Rate Since 2008

As we noted in our last post, the absolute level of EPS growth estimates has fallen to the lowest level since 2009 in North America and Europe, but has remained fairly stable in Asia and EMs.

What may be even more concerning than the level of those earnings growth estimates is the fact that they have fallen off so quickly. Indeed, the average EPS growth rate for companies in the MSCI North America and MSCI Europe has fallen by the most in any rolling three month period since late 2008. Whether this is thanks to the strong USD, weak commodities, or just plain slow growth is debatable. What is not debatable is that this trend is ugly.

About Gavekal Capital

Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
We offer the Gavekal Knowledge Leaders Strategy in multiple products for global investors. For more information about our product offerings please visit http://www.gavekalcapital.com.
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