European value stocks offer more growth potential

Value stocks in Europe have become unattractive to investors because valuations of value vs growth remain near all-time lows. Also in Europe, there are very few developed market equities which have been de-rated over the last five years, causing many investors to favour stocks in the US. However, over the last five years, Europe’s cheapest companies have actually delivered more profit growth than their growth counterparts. Therefore, value investors should be shopping in Europe, not the US.