Tue, Nov. 15, 7:45 PM
- The big gains in infrastructure stocks in anticipation of government spending on roads and bridges in a new Trump administration have some analysts warning that the rally is "getting long in the tooth."
- Among relevant companies up at least 12% since last Tuesday's election: PWR, FLR, VMC, JEC, MLM, KBR, ACM, SUM, EXP.
- One former infrastructure bull, Daniel Clifton of Strategas Research, thinks lofty expectations are now priced into the group, adding that the belief that fiscal conservatives in Congress who have long opposed increasing the deficit would suddenly pass a trillion dollars in spending has become too optimistic.
- Clifton also says Trump’s infrastructure plan in its current form relies entirely on private financing and “has little to do with the actual stocks that are rallying.”
- Greg Valliere, chief global strategist at Horizon Investments, reminds that "Washington moves slowly on huge projects like this, and there’s a lag time on the economic response."
- ETFs: XHB, ITB, XLI, PHO, IYT, VIS, XTN, FIDU, IYJ, PKB, FXR, UXI, RGI
Fri, Sep. 9, 5:50 PM
Sep. 3, 2015, 3:12 PM
- How bad a year has it been for multi-industry stocks? Year-to-date underperformance relative to the S&P 500 is among the poorest in a decade and has gotten worse in recent weeks, say Goldman analyst Joe Ritchie and team. The negative news is no secret: Broad industrial de-stock, softening oil capex, the strong dollar, and the troubles in China. Because of this, the team remains Neutral on the beaten-up sector, but does have a few names investors should steer clear of:
- With de-stock keeping U.S. industrial growth in a "headlock," the implications are particularly negative for Sell-rated Emerson Electric (NYSE:EMR), WW Grainger (NYSE:GWW), and Neutral-rated Parker-Hannifin (NYSE:PH) and Rockwell Automation (NYSE:ROK).
- With oil capex going from bad to worse, and oil lower for longer, the Street is underestimating the impact of price declines for Dover (NYSE:DOV), Emerson, and Flowserve (NYSE:FLS). On the flip side, lower input costs should be a boon to Buy-rated Illinois Tool Works (NYSE:ITW) and Neutral-rated 3M (NYSE:MMM).
- The weaker China backdrop is most negative for Emerson, and Neutral-rated Eaton (NYSE:ETN) and Colfax (NYSE:CFX). Though Buy-rated Honeywell (NYSE:HON) and ITT Corp (NYSE:ITT) have exposure, growth is more insulated due to their market share gains.
- Source: Barron's Ben Levinsohn
- ETFs: XHB, ITB, XLI, PHO, IYT, ITA, VIS, PPA, XTN, XAR, FIDU, PKB, IYJ, FXR, UXI, PRN, RGI, SIJ, PSCI, AIRR
Dec. 26, 2014, 4:25 PM
Apr. 7, 2014, 9:10 AM
- Twitter's down 32% this year, Facebook's off 20% in a month, and biotech nearly that much, but money is returning to the industrial sector. While the Nasdaq 100 posted its worst one-day drop since 2011 on Friday and last week fell for the 3rd week in 4, the Industrial Select SPDR (XLI) gained 1.6%.
- In the year's first quarter, the XLI had lost 1.4%, putting it in 9th place among 10 S&P 500 groups.
- "You’re seeing the beginning of investors shifting money ahead of a wave of spending,” says Drew Nordlicht of HighTower Advisors. “The expectation is, as the economy begins to kick into a higher gear, corporate America will utilize the amount of cash to spend on capital expenditures."
- GE comprises more than 10% of the XLI, and UTX, Union Pacific, Boeing, and 3M round out the top 5, each with holdings in the 5% range.
- Related ETFs: XLI, PHO, CGW, PIO, VIS, ITA, FIW, PPA, IGF, CARZ, IYJ, XAR, IPN, EMIF, FIDU, PRN, UXI, FXR, PXR, EXI, GII, EVX, FLM, RGI, SIJ, PSCI, NFRA, TOLZ, AXID
Dec. 20, 2013, 4:32 PM
Sep. 20, 2013, 4:25 PM
Aug. 20, 2013, 3:52 PM
- It's not surprising Q3 guidance in the water and renewable-energy sector was relatively subdued given mixed economic data and continuation of delayed orders for big projects, says Wedbush, however ...
- Only Tetra Tach ((TTEK) showed ill-effect from the sequestration and instead there are encouraging signs out of municipalities.
- Xylem (XYL) and Watts Water (WTS) said Europe had been worse than expected, but saw recent stabilization. While several noted weakness in China, A.O. Smith (AOS) bucked the trend with a 30% increase in sales there.
- Wedbush's favorites are low-risk, high performers like Pentair (PTR), Franklin Electric (FELE), and Valmont Industries (VMI). Valmont is a controversial name, but the team fells concerns over slowing irrigation business are baked into the stock and the valuation - particularly given the balance sheet and ROIC - is compelling.
- Names to avoid are Nuverra Environmental (NES), Aegion (AEGN), and Energy Recovery (ERII) given disappointing quarters for the first two and an extremely overvalued ERII.
- ETFs of note: FIW, CGW, PHO, PIO.
Mar. 26, 2013, 12:09 PM
U.S. water infrastructure gets a grade of 'D' from the American Society of Civil Engineers. Fixing the problem will cost ~$298B over 20 years. This and rising worldwide water demand may spell opportunity in water-related ETFs. PowerShares' Water Resources (PHO), the largest such fund, is up more than 10% YTD.| Mar. 26, 2013, 12:09 PM | 1 Comment
Jan. 29, 2013, 7:51 AMMore on Pentair (PNR) Q4 earnings: FY2013 outlook of EPS of $3.10-$3.30 vs. consensus of $3.23. Revenue of $7.6B vs. consensus of $7.75B. "We are seeing signs of momentum building in several end markets, such as global energy and North American residential." Pentair accounts for 7.95% of the Water Resources ETF (PHO). | Jan. 29, 2013, 7:51 AM
Dec. 17, 2012, 2:51 PM
Bullish on the water sector, BAML says it's not just about "pressure both on the supply and demand side." The Global Water Total Return Index has formed a year-long bottom relative to the S&P, says the analyst team. At least four ETFs claim to be plays on water - PHO, PIO, CGW, FIW - but it's worth a look under the hood to see exactly what they're holding.| Dec. 17, 2012, 2:51 PM
Dec. 14, 2012, 11:22 AMWill the western U.S. ever solve its water woes? Estimates suggest demand will continue to outstrip supply, much as it has in the past decade. By 2060, the median shortfall could reach 3.2M acre-feet - or about five times as much water as Los Angeles uses each year. When scientists talk about the need for “climate adaptation," this is what they mean, Brad Plumer writes. | Dec. 14, 2012, 11:22 AM | 4 Comments
Nov. 29, 2012, 3:42 PM
Pentair (PNR +2.8%) basks in an upgrade to Buy with price target of $58 from Bernstein. The move follows Pentair's 2013 EPS outlook of $3.10-$3.30 vs. 2012's expected range of $2.30-$2.35. Additionally, Pentair believes (presentation) it can earn $5 in 2015. The stock is the largest holding of the Water Resources ETF (PHO +1%).| Nov. 29, 2012, 3:42 PM
Nov. 27, 2012, 2:10 PM
Oct. 29, 2012, 5:35 PM
More on Flowserve (FLS) Q3 earnings: FY2012 EPS guidance narrowed to $8.20-$8.70, thanks to negative currency effects (but offset by continued share repurchases). "Softer conditions ... may impact the shorter cycle business and push out the timing of expected later cycle project investments." At 7.97% of assets, Flowserve is the 2nd largest holding of the Water Resources ETF (PHO). (PR)| Oct. 29, 2012, 5:35 PM
Oct. 12, 2012, 3:42 PM
Pall Corp. (PLL) is reiterated a Sell with a $57 price target at Macquarie following the stock's three-month 21.5% run. Other sell-side names - BofA, Credit Suisse and JPMorgan - stick with the momentum, raising their ratings and price targets. Pall is the largest holding in the Water Resources ETF (PHO) at 8.83% of assets.| Oct. 12, 2012, 3:42 PM