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📉 Stoch Markets: Is the worst really over? 🚀⁉️📝 I will try to analyze the market as a whole, with reference to the Russell 3000 index , which is broader than the S&P 500 . (Russell 3000 is a capitalization-weighted stock market index that seeks to be a benchmark of the entire U.S. stock market. It measures the performance of the 3,000 largest publicly held companies incorporated in America as measured by total market capitalization, and represents approximately 97% of the American public equity market). 📈 On the top chart we have the Russell 3000 . 📉 On the bottom chart, we have the Russell 2000 Growth divided by the Russell 2000 Value . (The Russell 2000 Index is a small-cap stock market index that makes up the smallest 2,000 stocks in the Russell 3000 Index). The intention here is to see how the companies classified in the 'Growth Investing' category are performing, using the 'Value Investing' companies as a parameter. 🤔 As a rule, it is to be expected that when traders and investors are more prone to risk, they invest more money in 'growth investing' companies than in 'value investing' companies. 1) Analyzing divergences 1.1) 2006-2008 In the period from 2006 to 2008 we had a divergence: the Russell 3000 had lower funds, while the Growth companies had higher funds. The apex was found precisely in the blue diagonal channel, on 12/30/2008. Note that Russell's bottom was only found on 03/10/2009, 3 months later. There is a clear anticipation in the contribution of 'Growth' companies. 1.2) 2014-2016 Russell tests the support of the green line several times, the last one being on 02/11/2016. Meanwhile, Growth companies remain on the rise, however reaching the blue diagonal channel again on 02/02/2017, 1 year later. In this case there was an outflow of 'Growth' companies, at least until reaching the blue diagonal channel. After that the increase continues. 1.3) 2018-2020 In this period we have a classic book divergence. The Russell peaks downwards on 21/12/2018, and later on 23/03/2020, featuring lower bottoms. Meanwhile, 'Growth' companies continue to 'respect' the green close with ever higher funds, reaching a low peak on the same date. 1.4) 2022-? Considering the bad macro-economic scenario, with the high cost of money and inflation, it would be surprising that the 'Growth' companies had a better performance than the 'Value' ones. Despite this pessimistic bias, if this indicator breaks above this green diagonal line and stays there, I will reconsider this opinion. If not, I think it is more likely that it will hit the blue diagonal channel again to form the final divergence. 🟢 For comparison purposes, considering a more global aspect and not just the small companies of the Russell 2000, the same analysis could be done on the ratio between the RAG and RAV indices (Russel 3000 Growth/Russel 3000 Value): 2006-2008 2014-2016 2018-2020 2022-? 🔵 What's important to note is that these key moments happened in December and March.
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by andre_007
$FL: Everything lining up for a big move up$FL has a nice setup in basically every timeframe here, which suggests it could make a major move to the upside from here after next week. If it were to fall below $37 this setup would be invalidated for the most part, so watch out for that. Pays a 4% dividend, has an 11% earnings yield, and 0.42 price to sales ratio, with very low debt and actually producing EPS growth this year, it doesn't get much cheaper than this for a stock with potential upside. Definitely worth a shot here. Best of luck! Cheers, Ivan Labrie.
NYSE:FLLong
by IvanLabrie
During high inflation focus on high pricing power equities2022 continues to prove difficult for investors around the globe. The conjunction of heightened geopolitical risks, increasingly hawkish central banks, and runaway inflation has forced many investors to change tack and modify their asset allocation significantly over the last 12 months. Duration has been lowered across asset classes, and a survey we commissioned1 recently revealed that 77% of European professional investors use equities to hedge against inflation. Fighting inflation by wielding Pricing Power Not all equity investments are equal in the face of inflation. The key differentiator is their ‘Pricing Power’. Pricing Power describes the ability of a company to increase its price without impacting demand or losing market share to competitors. In an inflationary environment, margins are under pressure because companies ‘import’ inflation, whether they want it or not. Overall costs for the companies increase through labour, supply, or energy. The only tool to mitigate the impact of inflation on margin is to increase prices. Companies with Pricing Power will be able to do so the most efficiently. Certain types of companies tend to have higher Pricing Power: Companies that deliver essential services tend to wield a lot of Pricing Power as they have somewhat captive clients. This is the case for many companies in the Consumer Staples, Healthcare, Utility, or Energy sectors. Companies that deliver high-quality products or services and possess a distinct competitive advantage can also increase prices efficiently. Luxury goods companies benefit from their clientele's relatively low price sensitivity. Some companies can benefit from favourable supply-demand dynamics at a particular point in time. This is, for example, the case of semiconductors in 2021 or energy companies this year. History is the best guide to the future As is our habit when trying to assess the future, we turn to the past for guidance. The below graph focuses on US-listed stocks since the 1960s. It assesses the average outperformance or underperformance of different groupings of stocks, since the 1960s, when inflation is higher than the last five-year average. We observe that, on average: High Quality stocks weathered inflation better than Low Quality stocks Value stocks beat Growth stocks High Dividend stocks outperformed Low Dividend stocks Small Cap and Low Volatility did better than Large Cap or High Volatility companies Overall, High Quality, High Dividend and cheap stocks appeared to fare better in high inflation environments. The same analysis on sectors shows that Value-orientated, High Dividend sectors also tend to do better against inflation. Energy, Healthcare, Consumer Non-Durables (Food, Tobacco, Textiles), and Utilities exhibit the strongest average outperformance during high inflation. It is clear here that the quantitative data aligns with our qualitative assessment. The factors and sectors that historically outperformed when inflation was high are those that have the greatest chance to harbour high Pricing Power companies. This should give investors indications on how they could tilt their portfolio to fight inflation. Quality and Dividend Growth to fight inflation In light of the unique challenges equity investors face, High Quality companies focusing on Dividend Growth could help strengthen portfolios. High Quality companies exhibit an 'all-weather' behaviour that tends to deliver a balance between building wealth over the long term whilst protecting the portfolio during economic downturns. Dividend-paying, highly profitable companies tend to: Exhibit higher pricing power allowing them to defend their margins by passing cost inflation to their customer. Exhibit lower implied duration, protecting them in a rate-tightening environment, thanks to a focus on short-term cash flows. Provide a defensive tilt and an enhanced capacity to weather uncertainty.
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by aneekaguptaWTE
Endgame for central banks far from doneThis week the UK economy posted its highest inflation reading in 41 years rising 11.1% year on year (yoy) in October. The recent jump is largely the result of the uprating of the household energy price cap in October. Core inflation moved sideways at 6.5% yoy. We expect this to represent the peak for UK inflation. As the base effects of high energy prices begin to factor in, headline inflation in the UK is likely to fall. At the same time, the ongoing recession is likely to strip away the underlying price pressures. This has been evident in lacklustre consumer demand alongside waning housing market activity. UK Government claws back its credibility with the Autumn Statement Meanwhile the UK Government’s fiscal statement released this week1, confirmed significant fiscal austerity with spending cuts and widening of the tax base amounting to around 2% of Gross Domestic Product (GDP) after five years, although its mainly backloaded. The energy price guarantee will now have its cap for average household dual tariff annual bill lifted from £2500 to £3000 from April 2023 and remain in place for a further 12 moths. This is less generous than the original plan to cap bills at £2500 for two years. The Office for Budget Responsibility’s (OBR) analysis suggests that the measures announced in the Autumn statement reduce the depth and length of the recession this year and next but leave the economy on a similar growth trajectory over the medium term. We expect real GDP to contract by 1.3% next year followed by growth of 2% in 2024. With this is mind, we expect the Bank of England (BOE) to pause its tightening cycle once rates get to 3.5% in December followed by 50Bps of cuts in H2 2023. Eurozone to endure a short recession Owing to the external supply shock, Eurozone has faced a similar inflation narrative as the UK. In October Eurozone inflation reached 10.6% yoy. We expect inflation to remain high in the next few months, however starting early next year, the annual rates should decline aided by the base effects from the surge in energy prices in 2022. Owing to which we expect European Central Bank to continue to tighten monetary policy until Q1 2023. On the positive side, while Eurozone will endure a recession in Q4 2022 and Q1 2023, we expect the recession to be less deep than previously expected owing to the less dire gas situation. This was evident in the November ZEW survey, which showed expectations gauge for the economy in the six months ahead improve significantly to -38.7 in November from -59.2 in October. This remains in line with our view that in six months’ time the Eurozone economy should be on its way out of a recession. Federal Reserve (Fed) speakers singing from the same hymn book Fed officials backed expectations they will moderate interest-rate increases to 50 basis points next month, while stressing the need to keep hiking into 2023. St. Louis Fed President James Bullard said policy makers should increase interest rates to at least 5% to 5.25% to curb inflation. He also warned of further financial stress ahead. Bullard’s comments came a day after San Francisco Fed President Mary Daly said a pause in rate hikes was “off the table.” Fed Governor Waller (one of the more hawkish Fed officials) emphasized that while rate hikes will likely slow to 50bp in December, the ultimate destination or “cruising altitude” will depend on labour market and inflation data. Waller echoed Atlanta Fed President Bostic’s concerns about labour costs pushing up service sector prices which in our view remains the key upside risk to inflation even as core goods prices have slowed. Fears are mounting that relentless rates increases will hit economic growth, with a critical segment of the Treasury yield curve at the most steeply inverted in four decades, historically such an inversion has tied in with a US recession. Maintaining a value bias within equities Amidst the challenging backdrop for global equities, we have observed the value factor outperforming the growth factor by 17.3%2 in 2022. Across global markets, European equities are trading at the deepest discount (32%) from price to earnings (p/e) ratio to their 15-year average owing to fears of the energy crisis being detrimental to the economy. The recent 3Q 2022 earnings season provided evidence that European earnings have remained stubbornly resilient despite the broader macro turmoil. A deeper dive into the sector level suggest that energy, transport, utilities and healthcare have seen some of the biggest increases to their Earnings Per Share (EPS) estimates in 2022. The WisdomTree Europe Equity Income Index outperformed the MSCI Europe Index in 2022. The performance attribution highlighted below illustrates that the higher exposure to value sectors such as materials, financials, healthcare, industrials, and energy contributed to the outperformance.
FRED:T5YIE
by aneekaguptaWTE
1
$XLV:$KRE: Deflation winners and losersWe're seeing value health care ($XLV) show a lot of relative strength against other sectors as the dollar has been pushing. ($KRE) is often tied to growth when compared to it's bigger brother ($XLF) and eventhough financials do tend to benefit from rising rates, this has been much more of a hard landing and the financial rotation many expect may not come to pass, instead look for $XLV to continue soaking up 2022 when compared to other sectors.
AMEX:XLVLong
by Fox_Technicals
Growth vs. Value: Skating to Where the Puck Will BeHockey legend Wayne Gretsky famously said: "Skate to where the puck is going to be, not where it has been." This sometimes applies in investing and trading. Towards what object have investors been skating, figuratively speaking? Currently, financial media, fund managers, and commentators have been emphasizing the opportunities in value over growth for several months. And for good reason: Energy, a value / cyclical sector unloved for about a decade, has outperformed every other sector this year by a huge margin. It has risen by approximately 20.5% since January 1, 2022. Even it's uptrend channel could not contain it (although it looks to be consolidating at the moment or perhaps mean-reverting). Increasingly, market participants have been "skating" towards value areas and away from growth for over a year now, as anyone who has been burned by long trades in tech / disruptive innovation knows. For example, a spread chart (also called a ratio chart) of ARKK/SPY shows just how dramatically growth has struggled. ARKK is a well-known US ETF containing high-beta stocks typically categorized as disruptive-innovation stocks, i.e., high growth names. This chart evidences just how much growth has struggled vs. the S&P 500. Notice, though, how this spread chart shows how close to major, long-term support the ratio has moved. Examples abound of high-growth names having been crushed in powerful bear markets in those names. Some of them are even top names with innovative products and services and an impressive record of earnings / sales growth: Square ( NYSE:SQ ) has declined about -68% from all-time highs, Upstart ( NASDAQ:UPST ) fell about -81% from its high to its low in late January 2022, and ( Roku ) dropped about 78% from its peaks. Even large cap tech not gone unscathed: Facebook NASDAQ:FB suffered a nearly -50% decline after a huge earnings / guidance disappointment. But in general, large-cap tech has been the exception in growth until the selloff this year. While growth / tech in general has struggled for months, large-cap tech names such as GOOGL, AAPL, MSFT, and NVDA have outperformed. Even AMZN's sideways move for about a year should be considered outperformance relative to other high-growth names as shown by the ARKK chart above: see the chart below, which is a relative chart of AMZN vs. ARKK, revealing that even with AMZN's lengthy sideways move, it has dramatically outperformed growth / tech names more generally. Markets are in constant flux. So often, just when the little people (retail traders like me) take notice of a powerful new trend or outperformance, it ends. So I'm trying to watch for where markets are moving rather than focusing on where they are. In short, is growth bottoming out relative to value? Here are a few charts to consider. 1. The main weekly chart above (also copied below) is a spread chart showing the ratio of NASDAQ:IJT (small-cap growth) vs. small cap value. Notice how close to major long-term up trendline support the ratio has moved. And the weekly ratio is also right at support at March 2021 and May-June 2021 lows. The RSI for this relative chart also shows that it's oversold to 33.65, a level that only appears in multi-month (and often multi-year) intervals. Even the two RSI lows in 1H 2021 occurred 2 months apart, but this is the exception looking back longer term. 2. Large-cap growth is right at support at a long-term uptrend line. See the weekly spread chart of the ratio between XLK/SPY. AMEX:XLK is a US ETF that is heavily weighted towards large-cap tech. 3. Equal-weighted growth vs. equal-weighted tech RYG/RPV is also very close to long-term upward trendline support. 4. Interest rates are nearing long-term downtrend channel resistance—at the upper line (the actual downtrend line). Interest rates have soared powerfully since mid-2020, and the Federal Reserve has hawkishly signaled coming rate hikes, and market participants have behaved as though rates will keep on going to the moon—by selling tech / growth, which struggle when rates rise b/c of discounting of future cash flows used to value such names. The viewpoint that rates could turn around in the near future seems radical, contrarian and unreasonable. But consider this chart below. Could rates turn around just after a large move just after millions of market participants have been flocking towards value names that outperform in rising-rate environments? Some well-known experts have already taken this view. www.cnbc.com It seems priced into the market right now that the 10-year yield could continue rising, that the interest rates could even breakout higher above long-term downtrend resistance, and that the Fed is likely behind the curve in controlling inflation. It seems consensus that value could continue to outperform long-term, and that growth could break even long-term support levels and continue to plummet. But if this is priced into the market, shouldn't one consider buying what's already priced in? Especially because maybe what is priced into the market will not last. Thinking about where the "puck is going to be" may suggest that tech / growth is making a multi-month or multi-year low or that interest rates are going to pullback in the next few months, allowing tech to thrive again.
NASDAQ:IJT
by SquishTrade
4
CB is a good buy stock for long term investors For the investors who look for long-run performance, this is for you. Chubb Limited, incorporated in Zürich, Switzerland, is a global provider of insurance products covering property and casualty, accident and health, reinsurance, and life insurance and the largest publicly traded property and casualty company in the world. The insurance sector is the best opportunity for long-term investing especially for a global company like Chubb. By reviewing the company profile we noticed: The net income for the last 3 years was : (8,816B for 2021) ( 3,533B for 2020) (4,454B for 2019) ( 3,962B for 2018) Year over year ratio YOY %: +149.53% for 2021 -20.68% for 2020 +12.42% for 2019 EBIT: (10,515 B for 2021) ( 4,678 B in 2020 ) ( 5,801 B in 2019) (5,298 B in 2018) Year over year ratio YOY % : +124.77% in 2021 -19.36% in 2020 +9.49 % in 2019 Free Cash Flow 11,093B for 2021 9,785B for 2020 6,342B for 2019 5,480B for 2018 Cash Flow incresing rate 13.36% in 2021 54.28% in 2020 15.73% in 2019 for the assets Total assets & Debt 199,054 B for 2021 with 15,131 B (Debt) 190,774 B for 2020 with 15,256 B (Debt) 176,943 B for 2019 with 13,867 B (Debt) 167,771 B for 2018 with 12,395 B (Debt) Debt-to-assets ratio %: 7.60% for 2020 8.00% for 2020 7.84% for 2020 7.39% for 2020 Top Institutional Holders Holder ---------------------Shares------------- Date Reported ---------% Out -------------Value Vanguard Group, Inc. (The) : 35,555,260 Sep 29, 2021 7.90% 6,168,126,504 Wellington Management Group, LLP: 28,179,660 Sep 29, 2021 6.26% 4,888,607,416 Blackrock Inc ^ : 27,411,957 Sep 29, 2021 6.09% 4,755,426,300 Capital International Investors ^:22,357,084 Sep 29, 2021 4.97% 3,878,506,932 State Street Corporation ^ :22,003,925 Sep 29, 2021 4.89% 3,817,240,909 --------------------------------------------------------- Final view The net income is increasing annually with a high ratio EBIT is increasing with a high ratio The cash flow increasing ratio is high Asset value increased over the years The debt ratio is low which is a good sign Chubb Limited is a good buy stock for long term investors For the position: Buy limit on 190$ -185$ area Buy limit at 157$ -163$ area buy limit at 140 $ -143 $ area in case the price makes a strong move against our position Targets: Take profit every 50% profit We expect to see a continuous increase in CB stock
NYSE:CBLong
by youssefallax
10Y U.S Bond Yield Signaling Rotation from Growth to Value StockTVC:US10Y I'm just looking at the 10Y U.S bond yield to try and better pinpoint the overall macro conditions to expect for the equity market this year. Based on my technical analysis, 10YUS yield is currently trading in an Elliot Wave 5 wave ABCDE pattern, it's inside a triangle that seems to also be the extension of a cup and handle bullish formation. The (D) pattern just reached the top of the triangle pattern, CCI indicator is also on the higher end which indicates the likelihood that this pattern will play out. Right now it looks like it's headed to the (E) phase of the pattern, which is the final phase of the correction before initiating a strong uptrend that could have the 10YUS yield reach 2% or higher (even potential of going pre-pandemic levels). Fundamentals also align with my theory that bond yields will fall from here on until about March, which is also when FED is expected to reverse QE (quantitative easing). After the (E) phase of the EW has been reached, I suspect a massive breakout in bond yields, which can cause a drop in equity markets along with an overall sector rotation from growth to value stock.
TVC:US10Y
by TheRealWolfette
Kimberly Clark 1971-1991.Analyzing stock Kimberly Clark 1971-1991. According to the book Good to Great by Jim Collins, the stock achieved a fifteen-year result 3.42 times higher than the market. I want to compare the period from the book in which the stock achieved excellent results (which was in the 20th century) and update that comparison with data from the 21st century to see how the stock has progressed further. For more details see my blog, an article should come out soon on this topic.
NYSE:KMB
by FinanciallyFitInvestor
What Analysts Got Wrong about the Recent Volatility.Since I'm not a professional analyst, I've sunk many hours of research in the past week to understand the recent move in the market on a deeper level. Here are my findings. I hope you find this informative. I've been hearing different analysts' opinions about the recent move in the stock market. I heard the money is moving from tech stocks to banks, or from growth stocks to value stocks. I'm here to say that neither is true. NASDAQ:GOOG is a tech stock and it's been rising. NASDAQ:COST is a value stock and it's been falling. Observe different stocks and you'll find numerous examples. The recent move is rather about companies in debt vs companies with free cash flow . It turns out that when interest rates are raised, it can be predicted with certainty that more money is going to flow into servicing existing debt rather than into productivity. Watch this talk with Brent Johnson to understand this concept, minute 50 to 60. Banks, who recently had their debts quantitatively eased, have more room to buy corporate bonds from companies like GM and Ford. This debt is used to service older debt. The big money, which understands this debt-based economy well, knows precisely where value is going when interest rates rise. Big money used their tried-and-tested calculations and decided to move their investments from free-cash-flow companies, to debt-generating companies. That's what's been happening, and that's the reasoning behind it. However, there is a point the smart money is missing and they keep missing it and never learn. There is much more value to reap from technology and innovation than there is in loan interests. This value of tech is not priced into their tried-and-tested calculations. It's probably too uncertain for them. But realize that when companies like Amazon, Apple, Google, Facebook, and Tesla create value through technology, they are carrying the rest of the useless debt-generating economy on their backs and creating prosperity for the entire nation and for the world. Real value is in productivity. The United States has moved slowly after WW2 from an industrial exporter to a liquidity and debt exporter of sorts, which also reflected on the US's internal economy. And that weakened the industrial sector over the decades and bubbled the financial sector to an overwhelming extent that it's sucking more and more money from productive businesses and pouring it into existing debts with the purpose of buying more time. The retail investor should learn and understand this in order to position themselves with high conviction on the side of technology and simply hold stocks like Tesla for a decade. You are already benefiting the economy by saving money aside and putting it in the right place and of course the reward is high. Let me know your thoughts. I probably made mistakes and left some statements in need of more elaboration.
SP:SPX
by TechNerdOmar
4
Oranges, Citrus, Commodity Inflation CycleI couldn't find any ETFs for oranges, I don't think one exists. In instances like this you have to get creative. In one of my value scanners, I found a citrus company $LMNR Limoniera. International citrus producer. I've been long this stock since it the mid-$14s. If the thesis on commodities, oranges, and global reflation turns out to be even somewhat correct, this stock should do alright. Revisiting or surpassing previous all-time highs is not out of the question.
NASDAQ:LMNRLong
by Ludwig_Von_Mises