Health care sector at rare premium to consumer staples


For the first time since 2006, the forward P/E ratio of health care stocks (XLVis above that on consumer staples (XLP), according to BAML (via Matthew Boes).

The crossover comes after more than a year of strong outperformance for healthcare names, with XLV up 47% vs. XLP up 21.3% since the start of 2013.

Related ETFs: IYH, IBB, XLV, XLP, XBI, VHT, BIB, PJP, BBH, VDC, FBT, XPH, CURE, PBE, IHE, FXH, RXL, IRY, IXJ, IHI, PPH, IHF, PSCH, XHS, FHLC, FXG, BIS, RYH, RHS, PSL, PTH, FSTA, XHE, AXHE, PSCC, DRGS, RXD

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Comments (5)
  • Gary Jakacky
    , contributor
    Comments (2940) | Send Message
     
    Old news by now, but not surprising. Health care has been a bull market leader, outperforming the S&P500 by a massive amount on a risk adjusted basis:

     

    http://seekingalpha.co...
    14 Feb 2014, 11:52 AM Reply Like
  • mjtroll1
    , contributor
    Comments (2684) | Send Message
     
    I looked at this as pairs trade and the underpeformance of XLP vs XLV make the slope of the downhill run at SOCHI look like parking lot.. there is no indication of turn but its definitely at an extreme... I guess one can assume that we turn bearish that this would reverse.. comments appreciated
    14 Feb 2014, 11:55 AM Reply Like
  • jlynchslu
    , contributor
    Comments (14) | Send Message
     
    I think we will see health care stocks come back down when the full effect of Obamacare kicks in during the next 12 months, then I believe consumer staples will be back on top as compared to the then battered health care industry.
    14 Feb 2014, 09:49 PM Reply Like
  • GaryLee276
    , contributor
    Comments (151) | Send Message
     
    I hope the MoMos pile into Biotech. I will sell and take the summer off after that.
    14 Feb 2014, 12:18 PM Reply Like
  • mjtroll1
    , contributor
    Comments (2684) | Send Message
     
    nice call on this pair.. 3yr range has been -2 (near when comment was written) to high of 12 its current 3 ..which is at top of steep down trend alluded to earlier.. 200dm is 6.4 which is what I'm aiming for
    8 Apr 2014, 03:32 PM Reply Like
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