FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., November 6, 2019. REUTERS/Brendan McDermidTraders work on the floor at the NYSE in New YorkReuters

Value investing, the strategy of stock picking popularized by Warren Buffett, is having a moment.

“Despite struggling in early October, Value recovered and ultimately outperformed, advancing 0.9% in October, and remains ahead in November,” wrote a group of Bank of America Merrill Lynch analysts led by Savita Subramanian.

Value investors pick stocks that they think the market is underestimating, and are thus trading below their intrinsic value. This trend outperformed momentum investing, another strategy where investors look to capitalize on market trends.

“We think this trend could continue,” the analysts wrote. That’s because value stocks are inexpensive relative to stocks that fit into the momentum category, and recent stabilization in macro data paints a positive picture going forward, according to the analysts.

In addition, value investing looks more stable than quality investing, according to BAML. “Quality has led in 2019, but now looks risky,” the analysts wrote. “It’s expensive, crowded and likely to lag if macro data inflects higher.”

Value, on the other hand, performs well in “early cycle” environments, which the analysts think is the next market phase.

“The only time in history that value has gotten this cheap was in 2003 and 2008, when Value outperformed Momentum by 22ppt and 69ppt, respectively, over the subsequent 12 months,” the analysts wrote.

In addition, value stocks could outperform even if the broader market stumbles, according to BAML. “When value’s shrank to all-time lows in Sep. 2000, value outperformed by 24ppt in next six months but the S&P 500 sported losses,” the analysts wrote.

Here are the seven main reasons to favor value, according to Bank of America Merrill Lynch:

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