Back to top

Image: Bigstock

Homebuilder ETF (PKB) Hits New 52-Week High

Read MoreHide Full Article

For investors seeking momentum, PowerShares Dynamic Building & Construction Fund (PKB - Free Report) is probably on their radar now. The fund just hit a 52-week high and is up nearly 31.6% from its 52-week low price of $19.74 per share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

PKB in Focus    

This product targets the homebuilding segment of the broad U.S. stock market. It is slightly skewed toward small cap securities with key holdings in building materials, engineering & construction, and construction materials. The fund charges investors 63 basis points a year in fees and is well spread out across components with each holding less than 6% share (see: all the Industrial ETFs here).

Why the Move?

The housing segment has been an area to watch lately, given the slew of upbeat data. This suggests that this corner of the market has started to show signs of a spring rebound after stalling in the first quarter. In particular, new home sales jumped 16.6% in April to the highest level since January 2008. Housing starts came in better than expected, rising 6.6%, and building permits rose 3.6% after declining for three months. On top of that, encouraging earnings report from the bellwether Toll Brothers (TOL - Free Report) further fueled optimism in the sector. Notably, TOL climbed 8.7% yesterday, representing its biggest one-day gain since April 23, 2013.

More Gains Ahead?

Currently, PKB has a Zacks ETF Rank of 2 or ‘Buy’ rating with a High risk outlook, suggesting continued outperformance in the months ahead. Further, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little further.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Toll Brothers Inc. (TOL) - free report >>

Invesco Building & Construction ETF (PKB) - free report >>

Published in