Big Data Download

Q2 Standout ETFs and Stocks

Big Data Download

Finding an investment worthy of your time and money may a difficult task, especially as the market closed at all-time highs. David Trainer, president of New Constructs, did some digging and came up with some ETF choices he thinks are poised to rise in the second quarter.

As an accountant in his previous life, he does what most investors don’t have time for and what Wall Street might not want you to. He pours through financial footnotes on company 10Ks, and uncovers buried stats that might make a stock more or less attractive. Trainer’s ETF ratings are based on the aggregated ratings of the stocks they hold. Traditional fund research is based on past price performance of an ETF. It’s questionable if such analysis provides insight in to the holdings, which are at the end of the day, what will drive future performance.

Through his footnote analysis, even after a 4.8-percent rise in March, he finds the consumer staples sector still offers the goods investors want. For the second consecutive Q2, the Consumer Staples Select Sector is Trainer’s number 1-rated sector for ETFs and Mutual Funds. (Two-percent of the stocks in the group fall in to his “dangerous” category). The Vanguard Consumer Staples ETF is another product poised to rise in Q2, according to Trainer.

Within the consumer staple sector, Trainer likes tobacco company, Altria. The company has a high return on invested capital and rising, while valuation assumes. After-tax cash flow has risen 10-percent compounded annually since the split with Philip Morris. He claims it’s a great business with low valuation risk.

One ETF Trainer is steering clear from this Q2 is ProShares Ultra Real Estate. 88-percent of assets in the group are pinned with his “dangerous” or “very dangerous” rating.

View Comments (13)