Jan. 8, 2014, 10:34 AM
- "The Safety Bubble Deflates," goes the title of a new report from Bernstein's Seth Masters, adding his name to those voices suggesting "safe" assets have become otherwise.
- Even though utilities, telecom, and consumer staples have underperformed of late, says Masters, their relative valuations are still well above the average over the last 50 years. "In periods of stress, investors tend to prize stability and safety too much. But in time, investors discover that every investment carries with it some degree of risk: if not risk of loss, then risk of inadequate growth."
- Related ETFs: XLU, IDU, VPU, NLR, GRID, JXI, NUCL, DBU, IPU, RYU, PUI, UPW, FXU, SDP, PSCU, AXUT, FUTY, UTLT, XLP, VDC, FXG, RHS, FSTA, PSL, PSCC, IYZ, VOX, IXP, IST, XTL, LTL, FCOM, TLL, AXTE
- Barron's Jack Hough says the "low beta" approach is a flawed one: First, volatility can change quickly as companies' or industries' fortunes shift; Second, beta tells one nothing about whether a stock's valuation is high or low. In a similar warning over low volatility stocks, BAML suggests looking for companies with smooth earnings rather than smooth stock prices. Screening for such, Hough finds CSX Corp (CSX -0.6%), DuPont (DD +0.6%), Cisco (CSCO -0.6%), and Halliburton (HAL -0.8%).
- Low volatility ETFs: SPLV, USMV, ACWV
Jan. 1, 2013, 11:40 AM
Oct. 29, 2012, 1:15 PMSome areas of the dividend universe (telecom, utilities) may be pricey, but dividend stocks are not in a bubble, says ClearBridge's Mike Clarfeld. He suggests looking not just at the upfront yield, but instead at the ability of the company to increase the payout over time. "The sweet spot ... attractive dividends, but really dividend growers - we don't think they are overvalued at all." | Oct. 29, 2012, 1:15 PM | 1 Comment
Oct. 17, 2012, 9:13 PMCurrently weighting U.S. telecoms and utilities at zero in his dividend stock portfolio, Pimco's Brad Kinkelaar notes both sectors are trading at near off-the-chart premiums to their average relative multiple. Dividend investors would do better to look overseas, he says, where one can find companies that are growing, paying good dividends, and trading at better value. An excellent presentation. | Oct. 17, 2012, 9:13 PM | 7 Comments
Aug. 25, 2012, 10:00 AMSouthern Co. (SO) and Verizon (VZ) may be the "poster children" among high dividend-payers as the quest for yield takes the utility (XLU), telecom (IXP), and consumer staples (XLP) sectors to frothy levels. The flip-side are health-care services (XHS), autos (CARZ), housing (IYR), and tech (XLK) - lower payers, but with relative valuations that have rarely been this cheap. | Aug. 25, 2012, 10:00 AM | 17 Comments
Jun. 28, 2011, 8:56 AM
Jun. 23, 2011, 3:18 PMST Ericsson warns it will take longer than expected to turn a profit due to falling demand for its legacy products. In an attept to turn things around, it plans to carry out a review of it's global workforce, aiming to save around $120M by 2012. ERIC -2.5%, STM -3.9%. | Jun. 23, 2011, 3:18 PM | Comment!
Jun. 21, 2011, 10:10 AMCredit Suisse downgrades Motorola Mobility (MMI -2.8%), saying "competitive headwinds are intensifying" from Verizon (VZ +0.4%) and other Android vendors, pressuring margins going forward. The firm cuts its 2011 EPS view by 27% and lowers its price target to $19. | Jun. 21, 2011, 10:10 AM | 2 Comments
IXP vs. ETF Alternatives
The iShares S&P Global Telecommunications Sector Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of companies that Standard & Poor's deems part of the telecommunications sector of the economy and important to global markets, as represented by the Standard & Poor's Global Telecommunications Sector Index. The index is a subset of the Standard & Poor's Global 1200 Index.
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