Whether focusing on growth stocks, value stocks, or a mix, the goal is the same: find and invest in undervalued assets. This thread remains true when considering how to invest across the 11 different stock market sectors. At certain times, specific sectors can see their value relative to the overall market trade at a discount.
A way to identify this is by looking at sector-specific forward price-to-earnings (P/E) ratios. As of May 2, according to Yardeni Research, the S&P 500 Index was trading at a forward P/E of just over 20. The analysis below will look at the three sectors trading the furthest below this figure, indicating that these sectors are potentially undervalued.
