By Paul R. La Monica
Being a value investor in a market that is infatuated with growth stocks and the artificial-intelligence trade requires patience. But one fund manager, who fittingly works for a firm named Patient Capital Management, is finding that a value approach to stock-picking can still work even in this momentum-driven market.
Christina Siegel Malbon, an assistant portfolio manager for the Patient Opportunity Trust mutual fund, told Barron's that thriving in an environment like this is all about owning bargain stocks that may not be considered deep value in the classic sense.
"We cast a much wider net. We're willing to buy companies that don't look cheap now but do when you go out a few years," she said.
That means owning companies that can benefit from the AI wave. Along those lines, hyperscalers Amazon.com, Google owner Alphabet and Facebook parent Meta Platforms are big holdings. So is AI chip giant Nvidia.
"We could still be early in the AI cycle and that makes it a risk to any value investor to not have these names in their portfolios," Malbon said.
Malbon notes that many of these stocks are no longer fetching giant premiums to the broader market, either. They are now priced more reasonably. Nvidia, Alphabet and Amazon trade between 23.5 and 26.5 times earnings estimates for this year, compared with a multiple of 22.2 for the S&P 500, according to FactSet.
And Meta Platforms has a forward price-to-earnings ratio of just 17. Malbon concedes that Wall Street is concerned that Meta may be behind in the AI race but she argues that investors are ignoring the massive earnings that the company still generates from its core advertising business.
The "patient" approach to value investing has paid off as well. The fund has posted a return of 35% over the past 12 months, topping the 25% increase for the S&P 500 since June 2025. And it's nearly doubled over the past three years, outpacing the S&P 500's 70% gain during the same time frame.
This growth-ier strategy for value investing also makes more sense when you consider that Patient Capital Management is backed by legendary value investor Bill Miller of Legg Mason fame. Miller is a senior advisor for the firm and minority owner. Malbon, who began working with Miller in 2013, said that she and other portfolio managers at Patient Capital still debate stock picks regularly with Miller.
So what else does Malbon like now? Malbon said Patient Capital is also bullish on two health insurance giants, UnitedHealth and Aetna owner CVS, which the fund has taken positions in over the past two years. She thinks both companies are making better decisions with regards to underwriting and that is paying off: UnitedHealth is up nearly 25% this year while CVS has gained 30%.
"The industry had gotten irrational with pricing," she said. "But they are starting to now optimize more for profitability instead of just customer growth."
Still, there are some top holdings that haven't panned out this year. The fund bought a stake in beaten down software company Adobe earlier this year but it has continued to slide.
Malbon said the selloff in Adobe is overdone. She still thinks the company can generate double digit gains in earnings and that the stock is cheap, now trading at just eight times earnings estimates for this year.
The fund has also made some bets on beaten down fintech plays as well, such as payments company Adyen and Global Payments as well as Coinbase, Chime and Fiserv.
Another notable laggard is QXO, the building supplies company and a 2025 Barron's stock pick. Shares are down more than 10% this year.
Malbon said one reason QXO, which bought Beacon Roofing Supply last year, has fallen is because of worries about a housing market slowdown since interest rates haven't come down due to inflation concerns. But the market may be also nervous about the company's aggressive acquisition strategy. QXO agreed to buy TopBuild for $17 billion in April.
Malbon said worries about acquisitions are misplaced. She remains a believer in the strategy of QXO CEO Brad Jacobs, the serial entrepreneur who helped build United Rentals and XPO Logistics, to gain market share through mergers in the fragmented building supplies business.
"The industry is ripe for consolidation," she said. "We're taking advantages of selloffs in QXO to buy the stock on pullbacks."
But even if QXO and other laggards in the fund don't rebound soon, it's just a tiny blemish on what's been a solid run of success for Malbon and her colleagues at Patient Capital. It looks like patience can be a virtue after all when it comes to investing.
Write to Paul R. La Monica at paul.lamonica@barrons.com
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(END) Dow Jones Newswires
June 22, 2026 14:49 ET (18:49 GMT)
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