The Zacks Analyst Blog Highlights: ETF SPDR S&P 500 ETF, Guggenheim Spin-Off ETF, PowerShares Dynamic Leisure & Entertainment ETF, First Trust US IPO Index Fund and Moody’s.
CHICAGO, July 15, 2013 /PRNewswire/ — Zacks.com announces the list
of stocks featured in the Analyst Blog. Every day the Zacks Equity
Research analysts discuss the latest news and events impacting stocks
and the financial markets. Stocks recently featured in the blog include
See exchange-traded fund (ETF).
See Standard amp; Poor’s Depositary Receipt (SPDR).
S&P 500 ETF (
: SPY-Free Report), Guggenheim Spin-Off
CSD Christopher Street Day
CSD Circuit Switched Data
CSD Computer Science Department
CSD Community School District
-Free Report ), PowerShares Dynamic Leisure &
Entertainment ETF (AMEX:
-Free Report ), First Trust US
Today, Zacks is promoting its ”Buy” stock
recommendations.Get #1Stock of the Day pick for free.
Here are highlights from Friday’s Analyst Blog:
3 Unknown ETFs that Continue to Crush SPY
The ETF industry continues to grow exponentially and evolve. Total
assets in US listed ETFs are close to $1.5 trillion, while the number of
products is more than 1,480 now. However, the industry continues to be
The largest ETF SPDR S&P 500 ETF (AMEX: SPY-Free Report) now has
more than $145 billion in
n.pr 1. in Ayurveda, the subtle, noiseless cosmic vibration in which consciousness existed in the beginning, before the elements appeared.
, while products in next three
spots–Vanguard Emerging Markets ETF (
)–each have more than $40 billion in
assets. Top 10 funds hold almost 30% of total industry assets.
Most investors continue to pour money into bigger, widely known
ETFs, even though sponsors continue to struggle to come up with new,
different types of products. Some of these ‘niche’ products
are forced to shutter their doors due to lack of investor interest.
Larger ETFs are usually more popular with investors as most of them
follow the simpler market cap weight methodology, often have lower
expense ratios and ample liquidity. (Read: Buy these ETFs for brighter
insurance sector outlook)
At the same time, investors should not ignore some of the ETFs that
try to outperform by selecting stocks using ‘better’ or
‘enhanced’ index methodologies or focus on some
‘niche’ strategies that are otherwise not available to retail
investors. Some such ETFs have been outstanding performers and are
expected continue their excellent performance going forward as well.
Below we present three such ETFs that have outperformed the broader
market year-to-date as well as over one year and three year periods. But
they remain rather unknown due to lack of investor interest.
Spin higher profits with Guggenheim Spin-Off ETF (AMEX: CSD -Free
Research shows that spun-off entities generally outperform their
parents and the broader market. They typically underperform in the first
few weeks of trading–presumably due to selling by institutional
investors, but they recover nicely subsequently and outperform by 22% in
the first year.
One of the reasons could be that investors prefer focused smaller
companies more than bigger diversified ones. (Read: QE Tapering could
make these bond ETFs winners)
CSD tracks the Beacon Spin-off Index that includes companies that
have been spun-off within the past 30 months but not more recently than
six months prior to the applicable
date. Index constituents
are primarily small- and mid-cap companies.
The index is comprised of up to 40 highest-ranking stocks selected
from a universe of spun-off companies, using a quantitative rules based
methodology. Each stock is given a modified market cap weighting with a
maximum weight of 5%, resulting in a pretty diversified basket. The
index is rebalanced semi- annually.
The product currently holds 27 securities in its basket, with an
average market cap of just $5.9 million.
Top holdings include Exelis Inc., Lumos Networks and Marriott
Vacations. In terms of sector allocations, Energy (23.4%), Industrials
(20.9%) and Consumer Discretionary (20.4%) occupy the top three
The fund charges an expense ratio of 60 basis points annually.
(Read: Winning Strategies for the second half)
Consumer Strength works great for PowerShares Dynamic Leisure &
Entertainment ETF (AMEX: PEJ -Free Report )
Consumer cyclical sectors are among a few sectors that are expected
to maintain a positive earnings growth for the second quarter. And this
comes as no surprise as consumer confidence remains near multi-year high
and consumer spending has remained resilient despite sluggish economic
Consumer discretionary and retail stocks have been doing pretty well
in recent months as the
A place where labor is exchanged for wages; an LM is defined by geography, education and technical expertise, occupation, licensure or certification requirements, and job experience
showed clear signs of healing.
Further, rising housing market and surging stock market added to the
“wealth effect”, resulted in rising consumer confidence.
Leisure and Entertainment sub-sector within this space is also likely to
benefit from the summer travel/holiday season.
Launched in June 2005, PEJ the tracks Dynamic Leisure and
Entertainment Intellidex Index.
The index is comprised of 30 US leisure and entertainment companies
selected on the basis of a variety of investment merit criteria,
including: price momentum, earnings momentum, quality, management
action, and value.
Top holdings include Liberty Media, Starbucks, Scripps Network, Time
Warner and Walt Disney. Restaurants (30%), Movies and Entertainment
(21%) and Hotels, Resorts & Cruise lines (18%) are the top
sub-industries that the product is exposed to.
The fund charges fees of 63 basis points per year.
First Trust US IPO Index Fund (AMEX: FPX -Free Report ) -A Play on
the Red-Hot IPO Market
The IPO market has been extremely hot this year, especially in the
second quarter-when a combined $13.1 billion was raised. The number of
IPOs surged to 62 during the second quarter, almost double from year-ago
levels and it appears that the strong momentum will continue in the
second half of the year.
One of the most successful IPOs this year was by Noodles &
Company, a fast-casual restaurant chain, which saw its shares surge more
than 100% on the first day of trading.
FPX provides a low-risk and convenient way to profit from the US IPO
The product tracks the IPOX-100 U.S. Index, which is modified
value-weighted price index measuring the performance of 100 largest,
typically best performing and most liquid U.S. IPOs.
Currently, the product has a nice mix of sectors, with top four
being Consumer Discretionary, Energy, Healthcare and Technology. In
terms of individual holdings, AbbVie, General Motors and Facebook take
the top three spots.
Moody’s Upgraded to Strong Buy
On Jul 11, 2013, Zacks Investment Research upgraded Moody’s
Corp.(NYSE: MCO-Free Report) to a Zacks Rank #1 (Strong Buy). With a
strong return of 70.4% over the past one year and a positive estimate
revision trend, Moody’s is an attractive investment opportunity.
Why the Upgrade? Upbeat first quarter results, strength in new domestic
debt issuance and improving clarity over
The extent to which a regulated firm or industry is permitted to earn an adequate return on the stockholders’ investment. This term is nearly always used in reference to utilities, which are required to obtain approval for rate changes.
contributed to the upgrade. Moody’s remains a solid franchise in
rating debt instruments based on its diversified credit research
business model and international growth opportunities. Moody’s
reported first quarter earnings of 97
cents per share
that were well
ahead of the Zacks Consensus Estimate of 87 cents. However, including
expenses of 14 cents, earnings were 83 cents per share, up
9.0% from the year-ago quarter. Revenues surged 13.0% year over year to
$731.8 million and exceeded the Zacks Consensus Estimate of $718.0
million. Domestic revenues soared 18.0% year over year to $406.1 million
in the reported quarter. International revenues increased 8.0% year over
year to $325.7 million in the quarter. Moody’s expects 2013
revenues to grow in the high single-digit percent range. Operating
expenses are projected to increase in the mid-single digit percent
range. Operating margin is projected to be between 41% and 42%. Earnings
for 2013 are expected to be in the range of $3.49 to $3.59 per share.
The Zacks Consensus Estimate for fiscal 2013 increased 2.6% to $3.58 per
share as most of the estimates were revised higher over the last 90
days. The current estimate is within the guidance range provided by
Moody’s. For fiscal 2014, the Zacks Consensus Estimate increased
2.4% to $3.90 per share. The long-term expected earnings growth rate for
Moody’s is 13.9%.
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