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Waters Fell on Profit Booking and Hurt IHI’s Large Caps

Peter Neil

IHI Gave Up Half of Its Gains from December 1

(Continued from Prior Part)

Large caps underperform

The large-cap stocks of the iShares US Medical Devices ETF (IHI) lost 0.75% and underperformed the fund itself, which gave a return of -0.55%. However, it outperformed the SPDR S&P 500 ETF (SPY) with a return of -1% on December 2, 2015. On this day, the IHI had 14 large-cap stocks accounting for ~76.3% of its portfolio. All of IHI’s large caps ended in red. IHI large-cap stocks include Medtronic (MDT), Abbott Laboratories (ABT), and Stryker (SYK), which gave returns of -0.5%, -0.55%, and -0.55%, respectively.

The above graph reflects the performance of IHI’s large-cap stocks in comparison with IHI and SPY. In the first two days of December 2015, IHI has outperformed SPY and IHI large caps. So far in December 2015, IHI large caps have returned 0.2%, IHI has returned 0.5%, and SPY has returned -0.05%.

Waters down on profit booking

Waters (WAT) was the biggest loser among large-cap stocks with a 2.0% fall on December 2, 2015. The stock went down on profit booking. The stock saw high trading volumes of ~800,000 shares as compared to the five-day average trading volume of 414,000. WAT closed at $130.79 and was trading 3.3% higher than the 100-day moving average price of $126.55. It was trading 1% lower than its 20-day moving average price of $132.13.

WAT’s RSI (relative strength index) is at 62, indicating that the stock is neither overbought nor oversold. Year-to-date (or YTD) WAT has given a return of 16.1%. WAT has a trailing-12-month price-to-earnings of 23.3x. WAT’s book value per share is $24.11. With its current price, the stock is trading at a price-to-book value (or PBV) of 5.4x as compared to the fund’s industry average of 3.5x. WAT has a weight of ~2.4% of IHI’s portfolio.

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