Seeking Alpha

BAML: Industrials deserve a look

  • Among BAML's Ten Reasons to Buy Industrials, most interesting is the team's argument for a P/E re-rating for the sector because of earnings stability. Industrials have the most stable earnings of all ten major market sectors - even against defensive areas like Consumer Staples - yet they're still penalized for being too cyclical. "There is a glaring mis-pricing of risk."
  • Another reason is the charts: Industrials have quietly broken out relative to the S&P 500 - a bullish trend for those liking to buy relative strength.
  • Relevant ETFs: FXR, IYJ, PRN, XLI, VIS, RGI, PSCI, UXI, SIJ.
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