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Here's Where This Fund Manager Says You Should Look for Stock-Market Bargains

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  Published in Stocks and Investing on Sunday, November 9th 2025 at 5:44 GMT by Investopedia
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Where This Fund Manager Says You Should Look for Stock‑Market Bargains

In a recent Investopedia feature, portfolio manager John M. Rogers—the long‑time director of the Midland Value Fund—offers a practical playbook for investors who want to find “bargains” in the equities market. Rogers, who has steered Midland’s 3.8‑million‑share fund through three bull markets and two bear markets, explains that value‑fighting is less about chasing the latest fads and more about disciplined, data‑driven identification of mispriced companies. His advice centers on three core principles: a focus on fundamentals, a willingness to overlook short‑term sentiment, and the use of low‑cost, diversified vehicles to gain exposure to the best bargains.

1. Fundamentals First

Rogers begins by reminding readers that the real bargain lies in a company’s underlying economics—its cash flow, earnings, balance‑sheet strength, and competitive moat—rather than the volatility of its price. “If the fundamentals are solid, the market price will eventually catch up,” he says. He cites a recent case study of a mid‑cap consumer‑goods firm that had been dragged down by a temporary earnings miss but whose free‑cash‑flow margin and dividend sustainability remained intact. When the firm’s price fell to a 10‑year low, Rogers bought in, and the share price has since recovered to a 4‑year high, delivering a 28% return for Midland.

Rogers also notes that valuation multiples—particularly price‑to‑earnings (P/E) and price‑to‑book (P/B)—are still reliable tools when combined with fundamentals. “I look for a P/E that is at least 20% below the historical median for its industry, and a P/B that is below 1.5,” he explains. He warns, however, against over‑reliance on a single ratio; instead, he suggests layering multiple metrics, including the price‑to‑free‑cash‑flow ratio and the dividend yield.

2. Cut the Noise

The article spends a significant portion of its body on the problem of “noise” in the markets. Rogers attributes the noise to an excess of high‑frequency trading, algorithmic momentum strategies, and short‑term earnings pressure. To filter out the noise, he recommends three tactics:

1. Look at long‑term charts. “A company that has been steadily trending upward for five years is more likely to be undervalued than one that oscillates wildly month‑to‑month,” he says.
2. Watch the debt level. A high debt‑to‑equity ratio can mask a fundamentally strong company if it’s financed through low‑interest debt.
3. Ignore the headlines. “A company that’s being dragged down by a one‑off regulatory issue might still be a bargain,” Rogers points out.

Rogers backs these suggestions with a short list of sectors that have historically outperformed during periods of market volatility: utilities, consumer staples, and financials. He argues that these sectors tend to attract less attention from momentum traders and therefore provide a richer pool of bargains.

3. Use Low‑Cost, Diversified Vehicles

When it comes to constructing a portfolio, Rogers recommends leveraging low‑expense index funds and ETFs that focus on value and dividend‑paying stocks. In particular, he highlights the following vehicles:

• Vanguard Value ETF (VTV) – “VTV offers exposure to the 400 biggest U.S. value companies at an expense ratio of only 0.10%.” The article links directly to the Vanguard website, where investors can review VTV’s holdings and performance.
• iShares S&P 500 Value ETF (IVE) – “IVE provides a more concentrated approach, focusing on the 500 largest U.S. companies.” It also links to Morningstar’s performance page for IVE.
• SPDR S&P Dividend ETF (SDY) – “SDY gives you a dividend‑heavy portfolio with a 10‑year track record of 8% annual dividend yield.” The Investopedia article includes a direct link to SDY’s prospectus.

Rogers stresses that these funds give investors “a diversified way to capture value without having to pick individual stocks,” a point he underscores by quoting a 2019 report from the CFA Institute that found low‑expense index funds outperform actively managed funds by an average of 0.4% per year after fees.

4. Tactical Themes for the Current Cycle

Finally, Rogers offers a snapshot of the current market environment and suggests specific tactical themes that investors should monitor:

• High‑Dividend, Low‑P/E U.S. Companies – “These often lag behind the broader market during rallies, but they’re attractive when prices are depressed.”
• Small‑Cap Value Stocks – The article links to a Bloomberg piece that details how small‑cap value has outperformed large‑cap value over the past decade.
• International Value Opportunities – Rogers points out that European and Asian markets are trading at historically low valuations relative to U.S. markets. A link to the MSCI World Value Index is included for readers who want to dig deeper.

He closes the article with a reminder that while these tactics can uncover bargains, the key to success is consistency and a disciplined approach to rebalancing and risk management.

Bottom Line

John M. Rogers’s Investopedia feature distills a decade of portfolio management into a clear set of guidelines: focus on fundamentals, filter out the noise, use low‑cost diversified funds, and pay attention to the sectors and themes that tend to offer bargains in a volatile environment. For investors looking to capture value in today’s market, the article provides a practical roadmap, supplemented with direct links to the recommended ETFs, performance data, and related research to help readers validate the strategies on their own.