A recession is brewing, inflation is likely to persist and it’s “critical” that investors look at valuations now, says Steven Glass, managing director of Bella Funds Management. “There are so many signals of a recession. I mean, this upside is huge. People don’t realize how big the upside is in 2-10 years. [Treasury yield] That’s actually historically the strongest signal of an imminent recession, Glass told “Squawk Box Asia” on Monday. He said only buying on value, or choosing companies that trade at low multiples. Instead, Glass said, investors should buy stocks at lower multiples relative to their growth outlook. It’s so important at this point,” he said. “We’ve gone a long way where ratings don’t matter. Things were trading at crazy multiples of earnings. If you’ve bought on momentum, you’ve done well.” But now, Klass warned that valuations could be pushed down if earnings cut and interest rates continue to rise. In this context of ‘cheap’ stocks to buy, Klass picked nine stocks. He said, “They look particularly cheap from their growth perspectives. .” These include Alphabet, BMW, US healthcare company Cigna, UK sports fashion retailer JD Sports Fashion, Hong Kong-listed Bing An Insurance and French construction company Vinci. The main beneficiaries of a potential slowdown and current inflation, which Glass said will see consumers continue to trade up. His favorites include major US discount retailer Dollar General, investment firm 3i, whose biggest assets are the European discount retailer operation and B&M Value Retail.The 2008 global financial crisis With strong same-store sales growth in the coming Covid era — “recession and inflation-proof” — Dollar General is holding its own, Glass says. International distribution. At 3i, Aktion accounts for 50% of its investment portfolio, and the discount retailer is a “beneficiary of the rich-poor divide,” he noted, with consumer trade declining. He said the move is “recession- and inflation-proof” and has an attractive valuation at a discount of more than 20% to its net asset value.
