Seeking Alpha

Sector P/E Data - Might Be Worth A Look

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Includes: BXUB, BXUC, DMRL, EPS, IVV, PPLC, RSP, RVRS, RYARX, SDS, SFLA, SH, SPDN, SPLX, SPUU, SPXE, SPXL, SPXN, SPXS, SPXT, SPXU, SPXV, SPY, SSO, UPRO, USMC, VFINX, VOO
by: Brian Gilmartin, CFA

A reader asked about sector P/Es a few weeks ago - haven't updated the above spreadsheet in a few years:

  • Financials - big jump in earnings growth rate, but i do think a lot of that is Berkshire's (BRK.A, BRK.B) gain. Berkshire is now the fifth-largest holding in the S&P 500 by market cap.
  • Energy still shocks me - the growth rate has been through the roof the last two years, and the sector has gone nowhere, no doubt due to Exxon's (NYSE:XOM) and Chevron's (NYSE:CVX) percentage of the sector.
  • Technology should be fine in Q1 '18, but a lot of the big cash repatriation should already be in the numbers.

Don't ignore the sector as a percentage of the S&P 500's market cap either: remember, Technology, Financials, Health Care and Consumer Discretionary (which is really being powered by Amazon and Netflix) make up 67% of the entire index's market cap. Tech, Financials and Health Care are 54%.

When earnings start, focus on the companies that are executing - the big buyback programs don't seem to be driving stock prices unless revenue and execution are present.

Out this week with more on this.

Thanks for reading.