Bill Nygren’s Case for Value Investing in a Top-Heavy Market
Wednesday, August 13, 2025 · Johnny Hopkins
During his recent interview with CNBC, Bill Nygren made a compelling argument for overlooked value opportunities. His strategy hinges on companies trading at steep discounts to the S&P 500’s inflated multiples, with a focus on share repurchases as a catalyst for growth. “The stock’s down at about five times earnings,” Nygren says of Charter Communications, a longtime holding. “The market doesn’t pay for as much as it should [for] the growth that can come from share repurchase.” This theme recurs across his portfolio: businesses with “very low multiples and not a lot of organic growth” using buybacks to drive per-share earnings growth rivaling pricier peers.
Nygren sounds a warning about the S&P 500’s concentration risk, noting its resemblance to aggressive growth funds of decades past. “The largest position in the S&P, Nvidia, is about 8% of the index. The top five names are over 30%,” he observes. With the index trading at 23 times earnings—versus 17 for the average stock—he argues it’s become a high-risk index, far removed from its traditional role as a stable core holding.
In contrast, nearly half of Oakmark’s holdings trade below 12 times earnings, offering a hedge against volatility. “For the investor who’s put most of their equity assets in the S&P 500, a nice risk reducer would be to own a value fund,” he advises.
His picks—including Charter, General Motors, Global Payments, and Ally Financial—trade at “seven times or less on next year’s expected earnings.” These companies, he acknowledges, face headwinds: GM’s earnings, for instance, are delayed by tariff disputes. Yet at five times earnings, he contends investors are “paid an awful lot to take on that risk,” especially given GM’s aggressive buybacks. “Two years ago, they took out more than 20% of their shares in one year,” Nygren notes, underscoring how capital allocation can offset cyclical challenges.
Nygren’s approach defies the market’s growth obsession, emphasizing margin of safety and disciplined capital returns. While the S&P’s tech-heavy tilt commands headlines, his portfolio highlights a quieter truth: “Reduced risk products today are some of the hottest in the mutual fund industry,” yet pairing the index with value remains “something that hasn’t really become popular.”
You can watch the entire interview here: