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The last week appeared to be overall downbeat as even bright spots in the Q1 results of tech behemoths failed to reinvigorate bullish sentiment on the Street, as I have discussed in my recent article.
IETC: Proceed With Caution As Valuations Remain Extreme
Summary
- IETC has a flexible approach to selecting tech stocks, prioritizing economic characteristics assessed by analysts and AI.
- From March 2018 to April 2022, it easily trounced both QQQ and IVV, delivering a ~21.4% compound annual growth rate vs. QQQ's ~20.6% and IVV's ~17.7%.
- ~88.3% of its holdings have an A (-/+) Quant Profitability grade.
- Owning a portfolio of evolved technology sector stocks might look appealing at first glance, but valuation should not be ignored, as the era of almost free capital is over.
Vasily Zyryanov is an individual investor and writer.He uses various techniques to find both relatively underpriced equities with strong upside potential and relatively overappreciated companies that have inflated valuation for a reason.In his research, he pays much attention to the energy sector (oil & gas supermajors, mid-cap, and small-cap exploration & production companies, the oilfield services firms), while he also covers a plethora of other industries from mining and chemicals to luxury bellwethers.He firmly believes that apart from simple profit and sales analysis, a meticulous investor must assess Free Cash Flow and Return on Capital to gain deeper insights and avoid sophomoric conclusions.While he favors underappreciated and misunderstood equities, he also acknowledges that some growth stocks do deserve their premium valuation, and its an investor's primary goal to delve deeper and uncover if the market's current opinion is correct or not.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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