Undervalued sector?

The question of which sector is the most undervalued in the market today is coming up more and more often. After the strong rise in technology and AI, investors are starting to look at industries that have been outside the main spotlight, even though their fundamentals look solid. The first candidate is energy, which, despite very strong cash flows and stable earnings, trades at low valuations. Oil may not attract as much attention as artificial intelligence, but investors often point out that physical energy will play a key role for a long time, and that’s why they consider it one of the most underrated sectors.

For me, the most interesting sector right now is REITs, and that’s for several reasons which together create one of the best value opportunities in the market. REITs have been under extreme pressure over the past two years due to high interest rates, which has often pushed their prices down to levels that do not reflect the quality of their assets or their long-term ability to generate stable cash flows. The market essentially punished the entire sector because of macro conditions, not because of fundamentals.

However, if rates start to fall — and this is exactly the scenario many investors now expect — it will have a direct positive impact on REITs. Financing costs will fall, valuations will begin to normalize, and property valuations as such will improve. Historically, REITs have been among the absolute top-performing sectors during periods of monetary easing. Some of the most interesting candidates are, for example, $O $VICI $PLD