Tag Archives: earnings-center

Auto Sales On Top Gear: ETFs And Stocks To Ride On

The U.S. automotive industry is on top gear with fat wallets, rising income and increasing consumer confidence adding adequate fuel. This is especially true as auto sales rose 4.4% to 8.52 million units in the first half of 2015, representing the best six months in a decade. And that’s not all, auto sales are on track to hit 17 million for full-year 2015, a record not seen in the last 15 years. Notably, June sales increased 3.9% to 1.48 million units, driven by an 11% rise in light-truck sales. Five of the six major American and Japanese automakers reported strong sales for the last month led by Nissan ( OTCPK:NSANY ), which saw 13% growth. This was followed by the sales increase of 8.2% for Chrysler, 4.2% for Honda (NYSE: HMC ), 4.1% for Toyota (NYSE: TM ) and 1.5% for Ford Motor (NYSE: F ). However, sales at General Motors (NYSE: GM ) dropped 3% in June. Outlook Remains Solid The auto industry is poised to grow given that the economy is gaining traction after a first-quarter slump. The labor market is strengthening, consumer spending is increasing, and the housing market is improving gradually. Further, lower gasoline prices are providing huge boon to auto sales. While a slowdown in China and instability in Europe are the major headwinds, higher demand for pickups and crossovers, a plethora of new models, lower interest on auto loans and the need to replace aging vehicles should continue to drive the industry for the rest of the year. Adding to these strengths would be the summer selling season, which has started off strongly for automakers, and the holiday season at the end of the year which has a tradition of driving sales. Apart from these, about 60% of the industries falling under the auto sector have a strong Zacks Rank in the top 28%, suggesting healthy growth. This is well confirmed by the sector’s strong earnings growth of 8.7% for the second quarter and 22.4% for the third. Overall, auto is expected to be the best sector of 2015 among our 16 Zacks sectors with earnings growth of 24.8%. Given the bullish trends, investors may want to take a closer look at the ETFs and stocks from this corner of the broad market and could ride high with the following products: ETF to Buy Investors should note that there is only a pure play First Trust NASDAQ Global Auto ETF (NASDAQ: CARZ ) in the space that provides global exposure to the 37 auto stocks by tracking the NASDAQ OMX Global Auto Index. It is a large-cap-centric fund and highly concentrated on the top 10 holdings with about 61% of assets, suggesting that company-specific risk is high and that the top 10 firms dominate the returns of the fund. The four prime automakers – Ford, Honda, Toyota, and General Motors – are among the top five holdings. In term of country exposure, Japan takes the top spot at 35.4% while the U.S. and Germany round off the next two spots with 23.8% and 20.1% share, respectively. CARZ is under-appreciated and ignored by investors as indicated by its AUM of only $33.4 million and average daily trading volume of just under 8,000 shares. The product charges 70 bps in fees per year and has gained about 4.4% so far this year. The fund has a Zacks ETF Rank of 2 or ‘Buy’ rating with a High risk outlook. Stocks to Buy We have used our Zacks stock screener to find out the best stocks in the auto space having a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Growth Style Score of ‘B’ or better. The Growth Style Score analyzes the growth prospects of a company with a thorough analysis of the income statement, balance sheet and cash flow statement that evaluate its financial health and the sustainability of its growth trajectory. The results show that stocks with Growth Style Scores of A or B when combined with Zacks Rank of 1 or 2 offer the best upside potential. Meritor Inc. (NYSE: MTOR ) Based in Troy, Michigan, Meritor is a leading manufacturer and supplier of automotive parts across the globe. It supplies drivetrain, mobility, braking and aftermarket solutions for commercial vehicle and industrial markets under the brand names – Meritor, Meritor WABCO, Euclid, Trucktechnic, Mascot, and Meritor AllFit. Meritor has seen rising earnings estimates by 2 cents for the current fiscal year over the past 30 days. The 2015 Zacks Consensus Estimate of $1.40 represents a substantial year-over-year growth of 36.9% versus the industry average of 6.82%. Further, the company delivered positive earnings surprises in the last four quarters, with an average beat of 63.56%. The stock currently has a Zacks Rank #2 with a Growth Style Score of A, suggesting incredible growth in the months ahead. PACCAR Inc. (NASDAQ: PCAR ) Based in Bellevue, Washington, PACCAR is a global leading manufacturer and designer of premium light, medium, and heavy-duty trucks operating under the Kenworth, Peterbilt and DAF brand names. The stock has seen positive earnings estimate revisions from $4.51 to $4.53 per share for 2015 over the past 30 days, representing a year-over-year increase of 18.65% versus the industry average of 13.22%. The company delivered an average positive earnings surprise of 4.32% in the last four quarters. The stock has a Zacks Rank #2 with a Growth Style Score of B, meaning that it could be primed for more growth in the months to come. Original Post Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

The Second Cyber Security ETF Has Arrived

Summary Cyber security stocks have been a popular technology play this year. First Trust comes out with new cyber security ETF, the second offering in the space. Focus on the First Trust NASDAQ CEA Cybersecurity ETF. By Todd Shriber & Tom Lydon Confirming that cyber security is one of this year’s hottest investment themes, First Trust, the sixth-largest U.S. issuer of exchange traded funds, introduced on July 7th, the First Trust NASDAQ CEA Cybersecurity ETF (NasdaqGM: CIBR ) , the second cyber security ETF to come to market since November. The first is the well-entrenched, fast-growing PureFunds ISE Cyber Security ETF (NYSEArca: HACK ) , an ETF that needed less than eight months of trading to eclipse $1 billion in assets under management. HACK, the household name among cyber security ETFs, entered trading Tuesday with nearly $1.2 billion in assets under management . CIBR will track the Nasdaq CEA Cybersecurity Index, which “is designed to track the performance of companies engaged in the cybersecurity segment of the technology and industrials sectors. It includes companies primarily involved in the building, implementation, and management of security protocols applied to private and public networks, computers, and mobile devices in order to provide protection of the integrity of data and network operations,” according to a statement issued by First Trust. Amid a spate of public and private sector data breaches, the most recent afflicting personal data of federal employees, cyber security stocks are getting increased attention and, more importantly, are surging. Although it has given back some gains in recent weeks, HACK is up 12.4% year-to-date, more than triple the 3.9% gained by the Nasdaq Composite. “Cybersecurity is gaining global attention following recent high profile security breaches,” notes First Trust . “The opportunity for cybercrime is expected to grow and may cost the global economy as much as $575 billion annually. As cybercrimes continue to increase, the global cybersecurity market is forecast to grow at a compound annual growth rate (CAGR) of 10.3% from $95.6 billion in 2014 to $155.74 billion in 2019.” CIBR’s underlying index, which began trading on June 23, is home to 34 companies, including AhnLab, Akamai (NASDAQGS: AKAM ), Check Point Software (NASDAQGS: CHKP ), Cisco Systems (NASDAQGS: CSCO ), CyberArk (NASDAQGS: CYBR ) and FireEye (NASDAQGS: FEYE ), according to Nasdaq data . Companies must have a minimum market value of $250 million, a minimum three-month daily dollar trading volume of $1 million and a minimum free float of 20% to be eligible for the index. CIBR and HACK may not be alone in the cyber security ETF space for long as Direxion has plans to introduce leveraged bearish and bullish versions of HACK . Cyber Security Estimated Spending Growth Chart Courtesy: First Trust Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…) I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Great ETF Picks For 2nd Half Of 2015

The global stock market ended the first half of the year in the green amid bouts of volatility and uncertainty. Though U.S. stocks, as represented by the S&P 500 index, have recorded their worst performance in five years, foreign investing took the credit. All the thanks go to ultra-easing policies across the globe in stark contrast to the U.S. Policy easing has however not helped to reduce volatility, which at the moment seems to be the only constant factor. The markets are grappling with the dire issue of unpaid debts in Greece and Puerto Rico, as well as the looming stock bubble in China. The developments in these areas will continue to unnerve investors as the second half unravels. There is the additional uncertainty of interest rate hike in the U.S. while a strong dollar will continue to play foul in the global financial world (read: ETF Strategies for 2H ). This is especially true as the U.S. economy has been on a moderate growth path as reflected in increased consumer confidence, higher spending power, renewed optimism in housing recovery and an improving job market. Meanwhile, waves of merger and acquisition deals will continue to brighten up the stock world. However, any downbeat data, including disappointing job growth, no wage increase, lower inflation, and less manufacturing and industrial activity, could delay rate hike or bring in more volatility. That being said, it seems that the second half will most likely resemble the first, extending the winning streak of the top performing ETFs of 1H. In fact, most of these ETFs have a top Zacks ETF Rank of 1 or “Strong Buy”, suggesting their continued outperformance for the rest of the year (read: Top Performing ETF Areas of 1H ). Below, we have highlighted some excellent ETF picks from three different categories given that there will be no major shift in fundamentals in the coming months. These funds should lead to big gains for investors and are worth a closer look heading into the second half. U.S. Sector ETFs Healthcare has been the soaring corner of the broad U.S. market so far this year, and this trend is likely to continue given the M&A boom, strong earnings growth, cost-cutting efforts, aging population and Obamacare. Combined with attractive fundamentals, the sector provides a defensive tilt to the portfolio due to its non-cyclical nature unaffected by global turmoil (read: 3 Buy-Ranked ETFs for a Healthy Portfolio ). Investor should focus on the iShares U.S. Healthcare Providers ETF (NYSEARCA: IHF ), which looks to offer exposure to the companies that provide health insurance, diagnostics and specialized treatment. Another alternative could be a small-cap play on the broader sector through the PowerShares S&P SmallCap Health Care Portfolio ETF (NASDAQ: PSCH ). Both funds gained 20.4% and 18.5%, respectively, so far this year. U.S. Style-Box ETFs 2015 is the year of growth as Americans are brimming with confidence instilled by their fat wallets and rising income. In particular, the small-cap space will likely be the major beneficiary of this trend as pint-sized stocks are closely tied to the U.S. economy and generate most of their revenues from the domestic market. This makes them safer bets than their large and mid-cap counterparts during a global turmoil. The Guggenheim S&P SmallCap 600 Pure Growth ETF (NYSEARCA: RZG ), which gained nearly 11% in the year-to-date frame, looks to be a compelling choice for the rest of the year. Global ETFs Global investing has been in vogue this year, reversing the past three-year trend. Though many developed and developing economies are still struggling with slower growth, Europe and Japan remained the bright spots and are gaining a lot of attention from investors this year. The iShares Currency Hedged MSCI Japan ETF (NYSEARCA: HEWJ ) and the WisdomTree Europe Hedged Equity ETF (NYSEARCA: HEDJ ) are the two popular picks in the broad Japanese and European stock markets. Both funds provide hedge against any fall in their respective currencies – yen and euro – which have been badly hammered. Moreover, rising concerns over Grexit have depressed many European ETFs in recent weeks, providing a solid entry point. HEWJ and HEDJ are up 17.6% and 10.5%, respectively, so far this year. In the developing world, China ETFs have been performing amazingly and are still on top at the midway mark, but it has been entering the bear market lately, dulling the appeal for Chinese products. On the other hand, the Indian economy has regained its strong momentum lately, after losing its shine this year. If this trend persists, the EGShares India Consumer ETF (NYSEARCA: INCO ) could be the best way to go. The fund added nearly 8% in the year-to-date time frame. Original post