Markets’ rally is an opportunity to look at value construct – Seymour Asset Management

[Growth stocks trading and bull market. Candlestick charts and data graphs of the financial market.]

Tim Seymour, founder and CIO at Seymour Asset Management, believes the recent equity rally represents a legitimate market response to oversold conditions and attractive valuations heading into earnings season.

With the S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) now trading at approximately 19x forward earnings—down from 22x—Seymour sees genuine opportunity for investors willing to look past short-term volatility.

The S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) is up 2.6% on Tuesday, while the Nasdaq Composite (COMP:IND [https://seekingalpha.com/symbol/COMP:IND]) is up 3.6%, and the Dow (DJI [https://seekingalpha.com/symbol/DJI]) is up 2.3%.

“There’s an opportunity to look at the value construct,” Seymour said in an interview with CNBC, noting that the market’s pullback from Liberation Day lows around 18x forward earnings has created favorable entry points.

He added that the VIX’s (VIX [https://seekingalpha.com/symbol/VIX]) recent movement has been “authoritative,” a significant shift from earlier rallies that weren’t confirmed by the volatility index.

For investors looking to put capital to work domestically, Seymour advocates a selective approach rather than broad market exposure. He favors integrated oil (USO [https://seekingalpha.com/symbol/USO]), (UCO [https://seekingalpha.com/symbol/UCO]), (DBO [https://seekingalpha.com/symbol/DBO]) and energy stocks (XLE [https://seekingalpha.com/symbol/XLE]), (AMLP [https://seekingalpha.com/symbol/AMLP]), (VDE [https://seekingalpha.com/symbol/VDE]) even if crude prices (CO1:COM [https://seekingalpha.com/symbol/CO1:COM]) retreat, while pointing to utilities (XLU [https://seekingalpha.com/symbol/XLU]), (VPU [https://seekingalpha.com/symbol/VPU]), (FUTY [https://seekingalpha.com/symbol/FUTY]) as both defensive plays and beneficiaries of data center demand.

Healthcare (XLV [https://seekingalpha.com/symbol/XLV]), (VHT [https://seekingalpha.com/symbol/VHT]), (IHI [https://seekingalpha.com/symbol/IHI]), (IXJ [https://seekingalpha.com/symbol/IXJ]), he noted, has underperformed due to contagion from software sector (IGV [https://seekingalpha.com/symbol/IGV]), (IGPT [https://seekingalpha.com/symbol/IGPT]), (XSW [https://seekingalpha.com/symbol/XSW]) weakness and presents an opportunity for patient investors.

Beyond U.S. borders, Seymour sees a secular shift underway that could benefit international markets for years to come. He argued that Europe (VGK [https://seekingalpha.com/symbol/VGK]), (IEV [https://seekingalpha.com/symbol/IEV]), (IEUR [https://seekingalpha.com/symbol/IEUR]) currently offers a more favorable deregulation environment than the U.S. and is supported by deficit spending initiatives.

“A lot of the oxygen in the room was choked out” by the Mag Seven (MAGS [https://seekingalpha.com/symbol/MAGS]) over the past five years, Seymour explained, leaving considerably more growth potential in international equities.

The case for international investing ultimately rests on fundamentals, according to Seymour, who manages the Amplify CWP International Enhanced Div Inc ETF (IDVO [https://seekingalpha.com/symbol/IDVO]). Free cash flow generation and disciplined stock picking support the thesis, particularly if energy prices normalize.

He emphasized that this represents a “five-to-ten-year reallocation” rather than a short-term trade and stressed that long-term investors should take advantage of current conditions rather than waiting for a clear signal that the time is right to buy.

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