What a difference a few years can make. It wasn’t that long ago that investors had written off Starbucks (SBUX) for dead. Fast food chains like IHOP (IHP) were serving up free pancakes. And previous darlings like Chipotle Mexican Grill (CMG) had forfeited 70%+ of its market value.
Yet recent upgrades to a number of food service giants may make PowerShares Dynamic Food and Beverage (PBJ) more attractive. PBJ has handily beaten the more aggressive S&P 500 over the last 3 months for momentum investors. ”Buy-n-hold-through-the-bear” investors have also done better with PBJ than with the S&P 500. (Click to enlarge)
Other recent upgrades heavily favor the Dow Jones Industrials Diamond Trust (DIA). HSBC Securities upgraded Alcoa (AA) and Solei upgraded DuPont (DD); meanwhile, Credit Suisse upped its price target on Boeing (BA).
All 3 of the aforementioned companies are in the the Dow 30 Industrials Index. And for those ETF enthusiasts who look at forward P/E ratios, DIA may indeed be poised to move higher over the medium-term.
What about entities that are getting the machete? According to WSJ.com, both Beazer Homes and Hovnanian Enterprises received recent downgrades.
Nevertheless, there hasn’t been a discernable or adverse impact on SPDR Homebuilders (XHB). Instead, XHB has a firm grasp on a technical uptrend.
Disclosure Statement: Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. The company and/or its clients may hold positions in the ETFs, mutual funds and/or index funds mentioned above. The company receives advertising compensation at the ETF Expert web site from Invesco PowerShares Capital Management, LLC. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities.