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The Zacks Analyst Blog Highlights: SPDR S&P Retail, Global X U.S. Infrastructure Development, Materials Select Sector SPDR, Technology Select Sector SPDR and SPDR S&P Transportation
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For Immediate Release
Chicago, IL – September 26, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include SPDR S&P Retail ETF (NYSE: (XRT - Free Report) – Free Report), Global X U.S. Infrastructure Development ETF (BATS: (PAVE - Free Report) – Free Report), Materials Select Sector SPDR ETF (NYSE: (XLB - Free Report) – Free Report), Technology Select Sector SPDR Fund (NYSE: (XLK - Free Report) – Free Report) and SPDR S&P Transportation ETF (NYSE: (XTN - Free Report) – Free Report).
The third-quarter (Q3) earnings reporting cycle has kicked off and will be in full swing over the next few weeks. It is now just a matter of time for investors to shift their focus from Trump, Fed and North Korea and put emphasis on earnings releases.
Bottom line may be investors’ top focus going into an earnings season, but top line probably tells you more about the inherent strength of a company.
Why to Follow Revenue Growth This Reporting Cycle?
For Q3, total earnings are expected to grow 3.1% from the same period last year on 5.1% higher revenues as per the Earnings Trends issued on Sep 20, 2017. Earnings growth will likely slacken from Q2's 11.1% rate while revenue growth will remain almost steady at 5.1% (last quarter’s was 5.5%).
For Q3, seven out of the Zacks classified 16 sectors of the S&P 500 will likely witness a decline in earnings while just one sector is expected to see revenue decline.
Further, investors should note that sales are harder to be influenced in an income statement than earnings. A company can land up on decent earnings numbers by adopting cost-cutting or some other measures that do not speak for its core strength. But it is harder for a company to mold its revenue figure.
Below, we highlight five sectors and their related ETFs that could be used to book some profits on revenue growth potential.
The sector is expected to expand 5.5% in Q3 followed by 4.9% expansion in Q2. Plus, the retail sector remains in the sweet spot entering into the fourth quarter as the holiday season unfolds and consumers’ shopping spree begins (read: 4 ETFs & Stocks to Dodge Harvey's Ire and Retail Sales Slump).
The sector is expected to record 11.3% revenue growth in Q3, following 8.8% expansion in the previous quarter. After all, Trump’s pro-industrial agenda and post-hurricane rebuilding should favor this segment. This makes PAVE an intriguing pick (read: Housing Stands Tall in 2017: ETFs in Focus).
As manufacturing activities gain momentum, demand for materials is likely to pick up. Plus, the economy needs to stabilize itself from Harvey and Irma’s ire, which demands stepped-up construction. In any case, metal prices are on a tear lately thanks to a subdued greenback and better demand-supply dynamics. All these bode well for material ETFs.
The technology sector has been positioned strongly thanks to improving economic and industry fundamentals and Trump’s proposed corporate tax reform. The sector is expected to witness revenue growth of 6.7% in Q3 earnings, after 7.6% growth in Q2.
The sector is expected to witness revenue growth of 5% in the ongoing reporting cycle, after 10.1% growth in Q2. The transportation sector is best positioned to take advantage of falling crude. This is especially true as energy costs form a major portion of the overall costs of this sector and falling oil prices are likely to boost earnings of airlines and shipping companies (read: 5 ETFs to Buy as Crude Crashes on Inventory Built).
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Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: SPDR S&P Retail, Global X U.S. Infrastructure Development, Materials Select Sector SPDR, Technology Select Sector SPDR and SPDR S&P Transportation
For Immediate Release
Chicago, IL – September 26, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include SPDR S&P Retail ETF (NYSE: (XRT - Free Report) – Free Report), Global X U.S. Infrastructure Development ETF (BATS: (PAVE - Free Report) – Free Report), Materials Select Sector SPDR ETF (NYSE: (XLB - Free Report) – Free Report), Technology Select Sector SPDR Fund (NYSE: (XLK - Free Report) – Free Report) and SPDR S&P Transportation ETF (NYSE: (XTN - Free Report) – Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday’s Analyst Blog:
5 Sector ETFs for Revenue Growth
The third-quarter (Q3) earnings reporting cycle has kicked off and will be in full swing over the next few weeks. It is now just a matter of time for investors to shift their focus from Trump, Fed and North Korea and put emphasis on earnings releases.
Bottom line may be investors’ top focus going into an earnings season, but top line probably tells you more about the inherent strength of a company.
Why to Follow Revenue Growth This Reporting Cycle?
For Q3, total earnings are expected to grow 3.1% from the same period last year on 5.1% higher revenues as per the Earnings Trends issued on Sep 20, 2017. Earnings growth will likely slacken from Q2's 11.1% rate while revenue growth will remain almost steady at 5.1% (last quarter’s was 5.5%).
For Q3, seven out of the Zacks classified 16 sectors of the S&P 500 will likely witness a decline in earnings while just one sector is expected to see revenue decline.
Further, investors should note that sales are harder to be influenced in an income statement than earnings. A company can land up on decent earnings numbers by adopting cost-cutting or some other measures that do not speak for its core strength. But it is harder for a company to mold its revenue figure.
Below, we highlight five sectors and their related ETFs that could be used to book some profits on revenue growth potential.
Retail – SPDR S&P Retail ETF (NYSE: (XRT - Free Report) – Free Report)
The sector is expected to expand 5.5% in Q3 followed by 4.9% expansion in Q2. Plus, the retail sector remains in the sweet spot entering into the fourth quarter as the holiday season unfolds and consumers’ shopping spree begins (read: 4 ETFs & Stocks to Dodge Harvey's Ire and Retail Sales Slump).
Construction – Global X U.S. Infrastructure Development ETF (BATS: (PAVE - Free Report) – Free Report)
The sector is expected to record 11.3% revenue growth in Q3, following 8.8% expansion in the previous quarter. After all, Trump’s pro-industrial agenda and post-hurricane rebuilding should favor this segment. This makes PAVE an intriguing pick (read: Housing Stands Tall in 2017: ETFs in Focus).
Basic Materials – Materials Select Sector SPDR ETF (NYSE: (XLB - Free Report) – Free Report)
As manufacturing activities gain momentum, demand for materials is likely to pick up. Plus, the economy needs to stabilize itself from Harvey and Irma’s ire, which demands stepped-up construction. In any case, metal prices are on a tear lately thanks to a subdued greenback and better demand-supply dynamics. All these bode well for material ETFs.
Technology – SPDR Technology Select Sector SPDR Fund (NYSE: (XLK - Free Report) – Free Report)
The technology sector has been positioned strongly thanks to improving economic and industry fundamentals and Trump’s proposed corporate tax reform. The sector is expected to witness revenue growth of 6.7% in Q3 earnings, after 7.6% growth in Q2.
Transportation – SPDR S&P Transportation ETF (NYSE: (XTN - Free Report) – Free Report)
The sector is expected to witness revenue growth of 5% in the ongoing reporting cycle, after 10.1% growth in Q2. The transportation sector is best positioned to take advantage of falling crude. This is especially true as energy costs form a major portion of the overall costs of this sector and falling oil prices are likely to boost earnings of airlines and shipping companies (read: 5 ETFs to Buy as Crude Crashes on Inventory Built).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.