Scharf Investments, LLC

“Regardless of the jobs number, we believe the Fed will cut 25 bps and then a continued 25 bps from there,” said Brian Krawez, CFA, president of Scharf Investments during a recent appearance on Reuters TV. He noted that there wasn’t anything in the data and recent remarks from Fed Chair Jerome Powell that would suggest a need to panic or consider a 50 bps cut. Brian shared his thoughts on the concentration we’re seeing in the stock market with the top 10 stocks representing roughly 70% of the return of the S&P 500 this year, which is unusual. However, we’re seeing the market broadening out and there are opportunities for investors to look outside of mega-cap tech stocks. Brian highlighted what makes U-Haul a compelling investment opportunity. Thanks Peter Devlin and Reuters TV for a great conversation. https://lnkd.in/gBrXrRxi Discussions in the link above include forward-looking assumptions and opinions by Scharf Investments and there is no guarantee that the recommendations will be profitable. Investments include risk of loss. The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The viewer should not assume that an investment in the securities identified was or will be profitable. #activemanagement #valueinvesting #quality #fed #inflation

We were privileged to host some of our Atlanta-area clients this past week at the TOUR Championship at East Lake Golf Club. We were treated to amazing weather and exceptional golf from the world’s best. The redesigned course was a big hit! We enjoyed spending time with clients and watching Scottie Scheffler cap off an amazing year. Many memorable moments and memories made. #clientappreciation #fedexcup #tourchampionship

Berkshire Hathaway stock reached an all-time high last week and the company became the first non-tech company to surpass $1 trillion in market capitalization. “This is a fantastic play on higher-for-longer interest rates. We're all talking about some coming cuts, but they still are a lot higher than they've been in the last two decades,” said Eric Lynch, managing director at Scharf Investments. “If you look at what's happened with Berkshire, there's a lot of focus on the investment portfolio, but the majority of this business is now an operating company and an insurance company under that. And their investment income is skyrocketing with these higher rates.” Berkshire Hathaway is a core holding within the Scharf portfolios and has been for years. We see significant opportunities for investors and have strong conviction in Warren Buffett and his leadership team. Thanks Josh Lipton, Seana Smith and Yahoo Finance for a great conversation. https://lnkd.in/ersTSDUP Discussions in the link above include forward-looking assumptions and opinions by Scharf Investments and there is no guarantee that the recommendations will be profitable. Investments include risk of loss. The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The viewer should not assume that an investment in the securities identified was or will be profitable. #activemanagement #valueinvesting #quality #warrenbuffett #berkshirehathaway

Brian Krawez, CFA, president of Scharf Investments, recently shared his views on the current market environment in a feature by Olivia Bybel and Citywire Selector. This has been a market dominated by the Mag 7 and mega-cap tech stocks and Brian believes that the other 493 companies in the S&P 500 may be worth considering as monetary policy eases and the Fed is poised to cut interest rates. “You’ve had a very concentrated market. We think this could be sort of a rotation where stock returns in general aren’t as high, but it could be actually better for some of the average stocks.” Read the full article here: https://lnkd.in/geb2ZU4B Discussions in the link above include forward-looking assumptions and opinions by Scharf Investments and there is no guarantee that the recommendations will be profitable. Investments include risk of loss. The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable. #activemanagement #valueinvesting #quality #averagestock

The Fed recently held their annual Jackson Hole economic symposium where Fed Chair Jerome Powell shared remarks regarding the economy and inflation, which he believes is on a sustainable path back to the Fed’s 2% goal. “The Fed has a really tough job, and I think this speech was a humble victory speech for Chair Powell,” said Brian Krawez, CFA, president of Scharf Investments during a recent appearance on Reuters TV. He noted that Powell took a lot of heat when inflation was at 9%, but that the Fed’s data-driven approach and Powell’s leadership should be appreciated given where we are today. Thanks Lisa Bernhard and Reuters TV for a great conversation. https://lnkd.in/g3VKvGSM Discussions in the link above include forward-looking assumptions and opinions by Scharf Investments and there is no guarantee that the recommendations will be profitable. Investments include risk of loss. The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The viewer should not assume that an investment in the securities identified was or will be profitable. #activemanagement #valueinvesting #quality #fed #inflation

With Q2 earnings season winding down, we’re seeing a broadening out among companies in the S&P 500 away from mega-cap tech and the Mag 7. “We’ve had tremendous earnings growth,” said Eric Lynch, managing director at Scharf Investments. He recently spoke with Tom Keene and Paul Sweeney on Bloomberg Surveillance and shared his thoughts on the convergence we’re seeing in earnings and how the market opportunities of today are reminiscent of those we saw during the post-tech bubble period nearly a quarter century ago. You can see Eric's interview beginning at the 2:29:10 mark in the link below. Thanks Tom Keene, Paul Sweeney and Bloomberg for a great conversation. https://lnkd.in/gBJBSEm4 Discussions in the link above include forward-looking assumptions and opinions by Scharf Investments and there is no guarantee that the recommendations will be profitable. Investments include risk of loss. The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The viewer should not assume that an investment in the securities identified was or will be profitable. #activemanagement #valueinvesting #quality #earnings #valuations

People are nervous about the AI trade, especially given that mega-cap tech and the Mag 7 underperformed practically everything in the month of July. In Q2, we started to see a broadening of earnings growth outside of tech in sectors such as financials and health care. “Investors are realizing that they don’t need to wait for the AI trade to work,” said Eric Lynch, managing director at Scharf Investments. He recently spoke with Doug Krizner on Bloomberg’s “Daybreak Asia” program and shared his thoughts on the convergence we’re seeing in earnings, as well as what Fed rate cuts and the US presidential election could mean for equities. You can hear Eric's interview beginning at the 19:34 mark in the link below. Thanks Doug Krizner and Bloomberg for a great conversation. https://lnkd.in/gN4W7M7k Discussions in the link above include forward-looking assumptions and opinions by Scharf Investments and there is no guarantee that the recommendations will be profitable. Investments include risk of loss. The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The listener should not assume that an investment in the securities identified was or will be profitable. #activemanagement #valueinvesting #quality #ai #averagestock #fed

With Friday’s jobs report and other recent economic data prints pointing to a slowing economy, the stock market is in the midst of a summer sell-off led by stretched-valuation stocks and mega-cap tech names. “Rightly so, investors have done an about face, scrutinizing tech and looking for new areas,” said Eric Lynch, managing director at Scharf Investments during a recent appearance on Reuters TV. Despite the tech wreck and increased volatility in the market, we see this as a “healthy recalibration” with plenty of opportunities for investors in other sectors where valuations are good. Thanks Lisa Bernhard and Reuters TV for a great conversation. https://lnkd.in/g9gbqPDj Discussions in the link above include forward-looking assumptions and opinions by Scharf Investments and there is no guarantee that the recommendations will be profitable. Investments include risk of loss. The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The viewer should not assume that an investment in the securities identified was or will be profitable. #activemanagement #valueinvesting #quality #downsideprotection

The dominance of the Mag 7 seems to be coming to an end. “Everything, but the Mag 7 ran in the month of July,” said Eric Lynch, managing director at Scharf Investments during a recent appearance on Reuters TV. There seems to be a convergence taking place between the Mag 7 and the rest of the stock market where earnings growth is coming from several sectors outside of tech, including financials and health care. We’re also seeing a sort of false choice in the market where on one side is big tech and on the other cyclicals. “In between are a number of high-quality, average stocks that no one thinks about that produce 10% earnings growth and they are cheap,” said Lynch. Health care is an attractive sector and Centene is a stock we find very compelling. Thanks Ludovica Brignola and Reuters TV for a great conversation. https://lnkd.in/g8wGN9V2 Discussions in the link above include forward-looking assumptions and opinions by Scharf Investments and there is no guarantee that the recommendations will be profitable. Investments include risk of loss. The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The viewer should not assume that an investment in the securities identified was or will be profitable. #activemanagement #valueinvesting #quality #centene

“The long leash investors were giving AI is probably over,” said Eric Lynch, managing director at Scharf Investments during an appearance on CNBC. The AI trade is concentrated on mega-cap tech names that are expensive and investors want to see these companies generating profits given the extensive investment in AI. When it comes to risk/reward in this space, Eric shared that Samsung is a very compelling investment opportunity. The company saw second-quarter revenues jump 23% YOY and operating profit increase by a whopping 1,500% YOY. Samsung trades at 10x earnings while U.S. mega-cap tech names such as Apple are trading at 30x earnings. “We’re modeling out 40% earnings growth for Samsung in 2025 and, if they receive accreditation by Nvidia for their HBM3E chip, the stock is poised to take off.” Thanks Tanvir Gill, Sam Vadas and CNBC for a great conversation. https://lnkd.in/g9vyynG5 Discussions in the link above include forward-looking assumptions and opinions by Scharf Investments and there is no guarantee that the recommendations will be profitable. Investments include risk of loss. The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The viewer should not assume that an investment in the securities identified was or will be profitable. #activemanagement #valueinvesting #quality #samsung #ai