June 6, 2013
/PRNewswire/ -- In a new report produced for S&P Capital IQ's LCD group, Wall Street leveraged finance specialist,
, offers investors fresh insights and recommendations on industry allocation for active managers. "A major theme that emerges from the analysis is that the classically defensive industries are greatly overpriced," says Fridson, CEO, FridsonVision LLC and consultant to S&P Capital IQ's LCD group. He recommends reducing exposure in Cable & Satellite TV, Containers and Healthcare.
For a copy of New Industry Analysis Shows Defensives Too Tight, click on the following link:
Citing the traditional difficulty of separating industry effects from ratings-related effects, Fridson has devised what he calls an "equalized-ratings-mix" valuation. Through calculations based on an industry's percentage breakdown by rating and outlook, Fridson arrives at a list of recommendations for investors to reduce and increase current exposure.
He cautions that the candidates for overweighting may underperform in the short run. Furthermore, capitalizing on the out-of-favor industries' relative undervaluation may require investing in distressed names. With those caveats, the industries most undervalued relative to their credit outlooks are Metals & Mining, Utility, and Energy.
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