Eq: Growth

Eq: Growth (18)

Wednesday, 18 August 2021 14:35

Why It’s Time to Choose Quality

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The market has almost everyone worried. Indices have been back and forth for months, but valuations keep grinding inexorably higher even as anxieties about the Fed and the economy proliferate. So how can advisors find the best returns for their clients in a way that potentially offers upside but also protects against a correction? The answer may be to add quality.

Take a look at the O’Shares US Quality Dividend ETF (OUSA). The fund is a quality-focused ETF that selects highly profitable, high quality companies with stable dividends. Investors intuitively understand that profitability is tied to returns, but many don’t understand the extent. Looking at five year returns in the S&P 500 using return on assets as a measure, one can see that top quartile companies have averaged a 20% return per year, more than double that of companies in the 4th quartile* . In other words, high quality companies provide a great deal more upside than their peers, and in a down market, these uber-profitable companies have also shown to exhibit better downside mitigation. Since inception (7/14/2015), OUSA has only captured 85% downside vs. 109% for the Russell 1000 Value Index using the S&P 500 as the reference benchmark, as of 6/30/2021.

Get ahead of the flight to quality in a down market. Get OUSA.

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 https://oshares.com/ousa-us/#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.


*Definitions:

Russell 1000 Value Index: Measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.

S&P 500: The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.

1st Quartile: Contains the top 25% of companies in the S&P 500 based on average 5-year return on assets. 2nd Quartile: Contains the top 25%-50% of companies in the S&P 500 based on average 5-year return on assets. 3rd Quartile: Contains the top 50%-75% of companies in the S&P 500 based on average 5-year return on assets. 4th Quartile: Contains the bottom 25% of companies in the S&P 500 based on average 5-year return on assets. ROA (Return on Assets): Indicator of how profitable a company is relative to its total assets, in percentage. Calculated as (Trailing 12M Net Income / Average Total Assets) x 100. Higher ROA: Defined as companies with ROA that is above the average for the sector. Lower ROA: Defined as companies with ROA that is below the average for the sector.

 

- This is sponsored content by O’Shares ETFs -

Before you invest in O’Shares ETF Investments Funds, please refer to the prospectus for important information about the investment objectives, risks, charges and expenses. To obtain a prospectus containing this and other important information, please visit www.oshares.com to view or download a prospectus online. Read the prospectus carefully before you invest.

There are risks involved with investing including the possible loss of principal. Concentration in a particular industry or sector will subject the Funds to loss due to adverse occurrences that may affect that industry or sector. The Funds may use derivatives which may involve risks different from, or greater than, those associated with more traditional investments. A Fund's emphasis on dividend-paying stocks involves the risk that such stocks may fall out of favor with investors and underperform the market. Also, a company may reduce or eliminate its dividend after the Fund's purchase of such a company's securities. Past performance does not guarantee future results. Shares are bought and sold at market price (not NAV), are not individually redeemable, and owners of Shares may acquire those Shares from the Funds and tender those shares for redemption to the Funds in Creation Unit aggregations only, consisting of 50,000 Shares. Brokerage commissions will reduce returns. The market price of Shares can be at, below, or above NAV. Market Price returns are based upon the midpoint of the bid/ask spread at 4:00 PM Eastern time (when NAV is normally determined), and do not represent the returns you would receive if you traded Shares at other times. O’Shares ETF Investments Funds are distributed by Foreside Fund Services, LLC. Foreside Fund Services, LLC is not affiliated with O’Shares ETF Investments or any of its affiliates.

Thursday, 08 July 2021 19:55

Growth Stocks Fuel Cathie Wood’s ARK Fund

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(New York)

There has been a constant battle in growth vs value since the start of the year. Value investors are looking for counter-cyclical hedges while…see the full story on our partner Magnifi’s site.

Monday, 05 July 2021 14:22

Goldman Picks These Stocks for a 100% Rally

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(New York)

The recent market turmoil has made some investors skittish over what to do in the stock market. But…see the full story on our partner Magnifi’s site

Infrastructure investment has changed vastly in the last few years. Not only is the sector at the epicenter of Biden’s stimulus packages, but “infrastructure” has evolved beyond the traditional view of buildings and transportation. Infrastructure investment now refers not only to road and rail—the literal backbone of 20th century development—but also to emerging global themes like decarbonization, clean water, and digital transformation. Further, infrastructure investment has expanded from municipal bonds to equities and other fixed income solutions. As in the past, there continue to be compelling reasons why an allocation in infrastructure makes sense for today’s portfolios:
• Consistent and stable return profile
• Strong portfolio diversifier.
• Focus on essential assets.

Why Now?

President Biden has put America’s aging infrastructure at the center of his presidency and there is a major infrastructure bill moving through Congress which we believe would provide unprecedented opportunity for investment in the sector.
But what is the best way to invest in infrastructure?

Essentially there are three routes. First, through globally listed infrastructure, which is currently trading very favorably levels*. For example, P/E ratios for infrastructure equity investments are well below those of other comparable investment profiles. Take a look at the MainStay CBRE Global Infrastructure Fund (VCRIX), a Lipper Award winning fund, to learn more.

Second, tax exempt muni bonds can be a strong and traditional option. Three-quarters of all infrastructure funding is provided by muni bonds, and the sector has generally had fewer credit downgrades than the bond market as a whole, largely because of the “essentiality” of the services that municipal issuers provide. For example, the provision of water, power, and education have not been greatly affected by recessions. An option for infrastructure investment via tax exempt muni bonds consider the IQ MacKay Municipal Intermediate ETF (MMIT), a highly rated fund by Morningstar.

Third, taxable muni bonds are an increasingly popular option which fulfil an important role in the ecosystem. Their issuance has surged since their effective inception in 2008 via Build American Bonds after the global financial crisis. They consist of largely the same issuers, but their taxable status means they can be utilized in areas where conventional muni bonds largely have not, such as qualified plans, pensions, endowments, and foundations. Check out the MainStay MacKay U.S. Infrastructure Bond Fund (MGOIX).


*Source: CBRE Clarion as of 3/31/21
All investments are subject to market risk, including possible loss of principal. Diversification does not ensure a profit or protect against a loss in a declining market.

Click on the fund name for the most current fund page, which includes the prospectus, investment objectives, performance, risk, and other important information. Returns represent past performance, which is no guarantee of future results. Current performance may be lower or higher. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

Please ask your clients to consider the investment objectives, risks, charges and expenses of the investment company carefully before investing. The prospectus and, if available, the summary prospectus, contain this and other information about the fund and can be obtained by contacting you, the financial professional. Instruct your clients to read the prospectus or summary prospectus carefully before investing.

“New York Life Investments” is both a service mark, and the common trade name, of certain investment advisors affiliated with New York Life Insurance Company.

FOR REGISTERED REPRESENTATIVES USE ONLY - NOT FOR DISTRIBUTION TO CLIENTS OR TO THE GENERAL PUBLIC.

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N.B. This is sponsored content, not FINSUM editorial.

Monday, 12 April 2021 17:30

Here is How to Invest in Surging Food Prices

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(New York)

You probably have not even registered it, but food prices have risen sharply since late last year. One big reason why this is going mostly unnoticed is that economists, and thus the media, like to report inflation with food and energy stripped out. According to Jefferies, “Almost unnoticed, broad food and agricultural prices have climbed vertically”. So the question is who will benefit, and luckily that is quite clear. Firstly, fertilizer companies tend to do well when food prices are high and are uncorrelated to other asset classes. And secondly, agricultural machinery is a big winner. The sector is already experiencing exceptional supply tightness, which is bullish for pricing. According to Barron’s “large tractor prices up roughly 20% year-over-year and small tractors up about 50%, on the back of significantly tighter inventories”.


FINSUM: Deere and AgCo seem like quite good buys given this backdrop.

(Washington)

It is not even close to approved yet, but the Biden infrastructure deal has been making serious waves. The implications of the deal are large and would send trillions of government dollars flowing into the private sector. With that in mind, here are four stocks that look like big winners from the package: Eaton Corporation (ETN), Jacobs Engineering Group (J), Herc Holdings (HRI), Mastec (MTZ). Three of these companies (other than HRI) are engineering/construction oriented, which makes sense. Herc Holdings is a rental company that leases vehicles (yes, the Hertz that went bankrupt last year).


FINSUM: Herc is interesting to us because they rent construction and earth-moving equipment. This injection of government dollars would flow through to them and provide a nice hedge against the headwind of the pandemic, which has slowed down retail car rental.

Monday, 22 June 2020 12:48

The 100 Stocks Thriving During COVID

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(New York)

It might be obvious if you are paying close attention to the stock market, but today we are covering a list of the top performing stock/companies during COVID. Most of the names are what you would expect, but there are a few surprises. No one would be surprised to see Amazon and Microsoft atop the list, with Tesla, Facebook, and Alphabet all in the top ten, but how about PayPal and Shopify (numbers 9 and 15 respectively). Zoom is also in the top 15, but Audi and Home Depot are also in the top 25. Salesforce is number 33.


FINSUM: Certain companies have boomed under COVID for a variety of reasons, and looking at a consolidated list is a great way to get a perspective on what is performing well.

Monday, 06 January 2020 11:24

Time to Get Aboard the Amazon Rocket Ship

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(Seattle)

Yes, Amazon looks expensive and has seen massive gains in recent years. This makes many fearful of the stock. But the reality is that the stock is a free cash flow rocket ship that is going to keep surging higher, according to 47 of the 49 Wall Street analysts who cover it. Amazon trades for 69x 2020 earnings, but it still looks pretty inexpensive on a free cash flow basis. The company’s past growth initiatives are now paying off, which means Amazon is throwing off free cash flow in a big way.


FINSUM: Amazon has averaged a 35% gain per year since it went public. We don’t see any big reasons why it cannot continue this year.

Monday, 23 December 2019 09:38

Two Blockbuster Stocks for 2020

Written by

(New York)

Standard Life analyst Andrew Milligan made two great calls this time last year. He picked Microsoft and Equinix as two breakthrough stocks for 2019. They rose 55% and 64% respectively so far this year. Now he has his 2020 picks ready. Milligan says to take a look at Visa, Mastercard, and 5G companies like Marvell technology. He also still likes Microsoft, for what that is worth.


FINSUM: We like the call on 5G. The new tech has sort of been in the background of mainstream investing consciousness, but next year could be when it explodes to the forefront.

Friday, 06 December 2019 07:56

Growth Stocks Look Ready to Run

Written by

(New York)

If it seems like value investing is dead, it is because it almost is. Even major adherents have moved away from the practice as growth stocks have greatly outperformed value stocks for so long. The growth sector has been led by large tech companies for the last several years, and many are wondering whether the gains can keep going. The answer, according to Credit Suisse, is “yes”. The bank has put out a piece reminding investors that in late stage bull markets growth stocks can often hit P/E multiples of 45-60x. The sector is currently only trading at 28x earnings. Credit Suisse singled out Microsoft and Raytheon as good cheap picks.


FINSUM: The optimism has been building in markets, so it would not be far-fetched to think a big late cycle run could be in the cards for growth stocks.

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