10-21-2016, 10:36 AM
(10-20-2016, 03:56 PM)EricL Wrote: I think it is simply the case of reversion to the mean. At its peak, DPS was trading for more than 23 times earnings, compared with a historical range of 15-16. Even after its pullback it is trading well above normal valuation levels. This can be seen across many of the "safe" consumer staples that had been bid up in the chase for yield, like MO, RAI, GIS, KMB, CLX, etc.
My guess is its simply a case of a rotation from the safe sectors into some of the beaten down ones like energy and industrials.
I think I agree with you. No specific news seems to be driving the decline, and I guess I didn't realize it's PE was so high. Thanks!