Displaying items by tag: large cap growth

Tuesday, 14 September 2021 18:46

Goldman Makes a Big Call on Tech Stocks

(San Francsico)

There are mixed signals as to how to currently position oneself in the market as news reports are calling many things a good buy, from doubling down on momentum to cyclical value stocks, but Goldman Sachs is bullish on lots of large-cap internet stocks. Amazon, Facebook, Snap, Uber, Lyft, and Expedia all received buy ratings from Goldman’s investment team. They see secular trends in revenue growth and operating efficiencies scaling these companies even larger over the next couple of years. While they don’t consider themselves overly bullish, they see digital advertising being a key lever to push for these companies to have their full upside priced correctly by the wider market. Subscriptions, the creator economy, cloud computing, and augmented reality are all reasons to be fans of large-cap growth, but they are staying away from Airbnb and Twitter. FINSUM: The fed-keeping rates low is very promising for growth companies that are reliant on the credit-frothy economy. But rate moves are also the key risk.

Published in Eq: Tech
Wednesday, 11 August 2021 18:18

The Market’s New Systemic Risk

(New York)

Any seasoned market veteran will tell you that today’s hottest thing might very well turn into the epicenter of tomorrow’s crisis. Tech stocks led to the Dotcom crash, structured credit led to the Financial Crisis. Now ask yourself, what is the hottest product of the moment? The answer is simple: ESG stocks. ESG is nebulous as an asset class since it crosses many boundaries, but in reality, a lot of the new ESG AUM has flowed directly into large cap tech stocks. This means that a lot of the buying going on in large cap tech is just de facto ESG buying.


FINSUM: ESG is a surging category and a lot of Dollars are flowing in. Since the term and its actual meaning are still vague, a lot of the money flows into tech, which is almost universally seen as ESG friendly. When might the music stop?

Published in Eq: Tech
Thursday, 15 July 2021 17:34

Are ESG Stocks in a Bubble?

(New York)

There has been rising anxiety of late that the growing assets in ESG stocks have created a valuation bubble in the most popular shares in the category. The idea is that rush into ESG has funneled a ton of capital into a relatively small group of shares, “artificially” inflating valuation. However, the Financial Times argues that there is definitively no bubble in these stocks. In fact, they are not valued any more richly than any average basket of shares. Overall, the average PE ratio of a global basket of ESG stocks is the same for an average basket of all stocks: 14x.


FINSUM: This is actually quite a relieving study, as there have been some very lofty AUM growth figures thrown around lately for ESG. And in case you are nervous, the same metrics/comparison listed above also hold for US/domestic ESG stocks.

Published in Eq: Tech

There may be a lot of noise around valuations and inflation, but ask yourself a question: do you think the tech sector is going to grow into a bigger part of the economy over the next few years? The vast majority of investors would say yes, and if you are in that camp, then it may make sense to commit a considerable part of your portfolio to the space. Inflation may rise, but the reality is that the fundamentals of the tech sector have been very healthy and have grown nicely. Don’t let short-term noise and anxiety distract from that.

With this in mind, check out O’Shares Global Internet Giants ETF (OGIG). The fund is at the forefront of helping advisors invest opportunistically in companies that are leading the economy’s digital transformation. Which means—you guessed it—these are high growth businesses.1 The fund’s constituent companies include those in the digital advertising, social media, e-commerce, and cloud services sectors. The average trailing twelve-month revenue growth2 for an OGIG3 constituent was 40%, versus 11% for the Technology Select Sector Index, and 22% for the Nasdaq 1004.

Over the last twelve months, OGIG outperformed traditional tech indexes by over 40%5 (in what was already a fantastic year), which speaks to its rules-based approach’s ability to select high growth, high appreciation stocks. The fund is also a way to invest in global growth, not just the US. If you want to invest in the Internet Giants of the future, look at OGIG.

 

QTD

YTD

1Y

S/I

OGIG (NAV)

-4.22%

-4.22%

110.11%

29.61%

OGIG (Market Value)

-3.98%

-3.98%

111.11%

26.98%

OGIG Index6

-4.09%

-4.09%

111.25%

30.27%

Nasdaq 1007

1.76%

1.76%

68.88%

25.12%

Technology Select Sector8

2.16%

2.16%

66.91%

26.31%

1. High growth businesses tend to be companies which have grown revenues, cash flows, and earnings faster than the market. Growth companies create value by continuing to expand reinvest their earnings for further expansion.Data as of 3/31/2021

2. Revenue growth is used as a measure of the increase or decrease of a company's sales. High Growth companies and revenue growth refer to the underlying characteristics of the fund's portfolio and does not represent or predict the performance of any fund.

3. Indexes are unmanaged and it is not possible to invest in an index.

4. Source: Bloomberg Finance L.P. Data as of 3/31/2021. Past performance is no guarantee of future results.

5. Bloomberg Finance L.P. Data as of 3/31/2021. Returns for periods more than 1 year are annualized. OGIG Inception Date: 6/5/2018. Investors cannot directly invest in an index. Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost.

6. OGIG Index: O’Shares Global Internet Giants Index.

7. Nasdaq 100: Modified capitalization weighted index of the 100 largest and most active non-financial domestic and international issues listed on the NASDAQ.

8. Technology Select Sector Total Return Index: The Technology Select Sector Index is a modified cap-weighted index. The index is intended to track the movements of companies that are components of the S&P 500 and are involved in the development or production of technology products. The index which serves as a benchmark for The Technology Select Sector SPDR FundXLK, was established with a value of 250 on June 30, 1998.

Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. For performance current to the most recent month-end, please visit www.oshares.com/ogig/#performance. Returns beyond 1 year are annualized. The total expense ratio is 0.48%. Click here for the fund's standardized returns.

Shares of the Funds are not individually redeemable and the owners of Shares may purchase or redeem Shares from each Fund in Creation Units only. The purchase and sale price of individual Shares trading on an Exchange may be below, at or above the most recently calculated NAV for such Shares.

Market Price returns are generally based on market value at 4:00PM Eastern time (when NAV is normally determined), and do not represent the returns you would receive if you traded shares at other times. Fund returns assume that dividends and capital gains distributions have been reinvested in the Fund at NAV.

- This is sponsored content by O’Shares ETFs -

Published in Eq: Tech
Thursday, 29 October 2020 17:20

How to Play the Market if Trump Surprises

(Washington)

Polls have Biden well ahead of President Trump at the moment. In fact, some pollsters say that Biden is further ahead leading up to election day than any candidate in the last 20 years. Markets have somewhat followed this and are clearly anticipating a Biden victory. That said, there is almost nobody who doesn’t think the race will be very close. So, how to play it if Trump surprises the markets and wins? Three sectors seem like they would benefit most strongly: traditional energy companies, defense companies, and large-cap banks. Trump’s light-touch regulatory approach would help energy companies and large banks, while defense spending would probably continue to rise under Trump.


FINSUM: Most agree that if Trump surprises, the market is not going to shoot higher like it did in 2016, primarily because there is not a big proposed tax cut.

Published in Eq: Total Market

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