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For Immediate Release
Chicago, IL – November 8, 2021 – 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: Invesco S&P SmallCap Industrials ETF PSCI, Invesco S&P SmallCap Consumer Discretionary ETF PSCD, Invesco S&P SmallCap Materials ETF PSCM, SPDR S&P Transportation ETF XTN and Invesco S&P SmallCap Information Technology ETF PSCT.
Here are highlights from Friday’s Analyst Blog:
5 Small-Cap Sector ETFs to Track on Earnings Strength
Small-cap stocks staged a great performance to start November. The cohort (up about 1.4%) has underperformed its bigger peers like the S&P 500 (up 10.1%) and the Nasdaq (up about 11%) in the past six-month period. But things are taking a turn for the better for the pint-sized stocks. The small-cap benchmark Russell 2000 rose to close at an all-time high on Nov 2.
Still, it’s earnings time. Investors must be interested in knowing how the earnings picture is evolving for the segment. That would give investors a clear idea in assessing the future performance of an otherwise still-undervalued small-cap segment.
Q3 Performance: S&P 600 Versus 500
Third-quarter earnings for the S&P 500 are expected to be up 30.3% year over year on 14.1% higher revenues. This increment in earnings will follow a 95% increase in Q2 and a 50.1% uptick in Q1. Revenue growth in Q2 and Q1 was 25.3% and 10.4%, respectively.
Looking at Q3 as a whole for the small-cap index, total earnings are expected to be up 44.4% from the same period last year on 16.1% higher revenues. The growth in earnings will follow a 280% expansion in Q2 and a 339.8% uptick in Q1, per the Zacks Earnings Trends issued on Oct 20, 2021. Revenue growth in the past two quarters was 34.4% and 7.8%, respectively.
Against this backdrop, below we highlight a few small-cap sector ETFs that are promising a better earnings and revenue growth rate in the ongoing reporting season.
Sector ETFs in Focus
Industrial Products — Invesco S&P SmallCap Industrials ETF
This sector of the S&P 600 Index is likely to record 32.4% earnings growth in Q3 on 18.2% higher revenues. The fund has gained 5.8% this year.
Consumer Discretionary & Retail — Invesco S&P SmallCap Consumer Discretionary ETF
The consumer discretionary sector is likely to end the third quarter with a 16.8% increase in earnings and 25.6% revenue gains. The retail sector is likely to see earnings growth of 66.9% on 13.3% revenue growth. The fund PSCC has gained 3.9% in the past three months.
Basic Materials — Invesco S&P SmallCap Materials ETF
Earnings are likely to be up 177% year over year on 17.8% higher revenues. The fund has advanced 3.9% in the past three months.
Transportation — SPDR S&P Transportation ETF
Earnings are likely to be 1255.1% higher while revenues may see a 35.1% uptick. The fund XTN has gained 2.5% in the past three months. Though not fully exposed to the small-cap stocks, the underlying S&P Transportation Select Industry Index of the fund XTN represents the transportation segment of the S&P Total Market Index.
Technology — Invesco S&P SmallCap Information Technology ETF
The sector is likely to close out the third quarter with a 47.6% increase in earnings and 10.8% revenue gains. The fund PSCT has added 4.5% in the past three months.
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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/performance for information about the performance numbers displayed in this press release.
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Invesco S&P SmallCap Information Technology ETF (PSCT): ETF Research Reports
SPDR S&P Transportation ETF (XTN): ETF Research Reports
Invesco S&P SmallCap Industrials ETF (PSCI): ETF Research Reports
Invesco S&P SmallCap Consumer Discretionary ETF (PSCD): ETF Research Reports
Invesco S&P SmallCap Materials ETF (PSCM): ETF Research Reports
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