“Overall, declining Net/Gross PP&E levels signal continued subdued growth for the U.S., but pockets of opportunity remain”

Valens Research would like to share with you our Litman Letter for July 2016, which looks at the relationship between “net to gross” property, plant, and equipment (PP&E) levels, an important indicator of management’s keenness or reluctance to invest in their asset base.

This Litman Letter, a monthly newsletter written by our Chief Investment Strategist Joel Litman, discusses how the net-to-gross ratio of PP&E levels has fallen to the lowest level measured in the S&P 1500 in 15 or more years, an indication of how firms are prioritizing asset efficiency over maintenance capex outlays and new investments.

In the file linked below, you will find a study of the net-to-gross PP&E levels of the S&P 1500, and how these levels indicate that management teams continue to be wary of investing in growth, even in the low interest rate environment.

Hope you find the article interesting.

Valens' equity and credit research relies on a bedrock of deep fundamental forensic analysis with a coverage of over 4,000 equities and all major corporate credit. That means “cross-capital” equities and credit research are not siloed, but instead are fundamentally aggregated and compared with orthogonal data points.