Scharf Investments, LLC

For some time now, the story has been mega-cap tech and the Mag 7, but that started to change in Q2 when you saw earnings broadening to other sectors outside of tech. Say hello to the Wonderful 111! “There are actually 111 stocks within the S&P 500 that are expected to grow earnings for Q3 above 15% and only four are Mag 7 companies,” said Eric Lynch, managing director at Scharf Investments during an appearance on October 29, 2024 on Reuters TV. We believe these non-Mag 7 companies are much more compelling from a risk/reward standpoint as their 2025 estimated valuations are half that of Mag 7 companies (15x vs 30x). Thanks Reuters TV for a great conversation. https://lnkd.in/gmEiCyan 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 #wonderful111

Tesla’s “We, Robot” event will be held this evening. After several years of discussion, the company is expected to unveil its efforts around a robotaxi and plans to enter the autonomous driving business. “It’s a huge deal and they really need to pull something out of the hat,” said Eric Lynch, managing director at Scharf Investments during an appearance yesterday on Schwab Network’s “Morning Trade Live” program with Oliver Renick. Unlike their position as a first mover when they transformed the automotive industry, they are behind companies such as Waymo and Baidu who have been in the autonomous driving business for the past 10 years. “It’s not like they are in a pole position this time,” said Lynch. What will Tesla do to differentiate themselves and transform this space? We’ll see tonight. Thanks Oliver Renick and Schwab Network for a great conversation. https://lnkd.in/dXYnPQr3 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 #usstocks #tesla #baidu #waymo #robotaxi #autonomousvehicle

All of us at Scharf Investments support our clients, their families and friends throughout the Southeast impacted by Hurricane Helene. We have made donations to World Central Kitchen and The Humane Society of the United States to aid in the ongoing relief efforts and bring hope to those in the midst of this historic disaster.   As our friends in Florida brace for the impact of Hurricane Milton, please know that Scharf Investments is here to support you and assist you in planning for life’s unexpected events.

With third quarter earnings season underway, what can investors expect? “I actually think we’re going to have a stronger than expected earnings season,” said Eric Lynch, managing director at Scharf Investments during a recent appearance on Reuters TV. We had strong earnings growth in Q2 and it was broad-based among companies beyond the Mag 7. “More companies have outperformed the S&P 500 in recent months than they have in 30 years,” said Lynch. Thanks Peter Devlin and Reuters TV for a great conversation. https://lnkd.in/gq_-2r8x 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

During this holy week of Rosh Hashanah and Yom Kippur, we pause to remember all those who lost their lives one year ago on October 7th. We also remember all those who have suffered over the past year. We hope for a return of all hostages and for peace in the Middle East.

With escalating tensions in the Middle East, there is concern for increased market volatility and a focus on geopolitical risks. “We don’t think that geopolitical risks are fully priced into the market at this time,” said Brian Krawez, CFA, president and lead portfolio manager at Scharf Investments. He recently spoke with David Pollard of Reuters TV’s “Market Insight” program. A widening conflict is going to be disruptive to supply chains and global trade. We believe investors should look for companies that can do well in any environment. Brian highlighted a couple of companies—Lockheed Martin and Occidental Petroleum—that have the potential to perform well regardless of geopolitical turmoil. Thanks David Pollard and Reuters TV for a great conversation. https://lnkd.in/gvMe6uj8 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 #geopoliticalrisk

All of us at Scharf Investments wish our colleagues, clients, and friends who are celebrating a very happy Rosh Hashanah. May the new year bring peace, joy, good health, and prosperity. #RoshHashanah #ShanaTovah #HappyNewYear

“This is a boring stock—they make medical devices—but the stock beat guidance and estimates, and it’s up 27% quarter to date,” said Eric Lynch, managing director at Scharf Investments, during an appearance on September 17, 2024 on CNBC where he highlighted Smith and Nephew (SNN). We believe there are many stocks like this one, outside of tech, with opportunities for investors to make money. Thanks Tanvir Gill, Sam Vadas and CNBC for a great conversation. https://lnkd.in/gG7z-UXA 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 #smithandnephew #boringstocks

With the Fed meeting this week to discuss cutting interest rates for the first time since 2020, the big question now is how big a cut? “Whether it’s 25 or 50 basis points, I don’t think it matters too much,” said Eric Lynch, managing director at Scharf Investments during an appearance on Reuters TV on September 13, 2024. “What’s more important is what the general trend looks like for the remaining Fed meetings this year.” Eric shared that consumers will see some relief in the short term for those with variable interest rates on credit cards. He also mentioned that first-time homebuyers will also benefit as mortgage rates start to come down from their recent peak. As for the impact on equities, Eric believes a 50 basis point cut would add “renewed vigor to the equity markets.” Thanks Lisa Bernhard and Reuters TV for a great conversation. https://lnkd.in/giWitaf3 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 #equities #downsideprotection #federalreserve #interestrates

While the Fed is poised to begin interest rate cuts next week, investors are concerned about the economy and whether we will have a soft landing. “Right now we are still doing alright, and if the Fed can mildly reduce rates and jobs growth continues, then we need to start looking more closely at earnings growth,” said Eric Lynch, managing director at Scharf Investments during a recent appearance on Yahoo Finance. We saw broad-based earnings growth in Q2 outside of tech. So far in Q3, we’re seeing negative returns for the IT sector and other sectors that were laggards a year ago now becoming leaders with real estate, consumer staples, and health care delivering positive returns. “It’s really a good time to broaden out your portfolio without a lot of risk as these are defensive sectors.” Eric's interview begins at the 3:19 mark in the link below. Thanks Brad Smith and Yahoo Finance for a great conversation. https://lnkd.in/ggiKayNq 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 #equities #earningsgrowth #interestrates #federalreserve