|Bid||123.76 x 1100|
|Ask||134.67 x 1400|
|Day's Range||0.00 - 0.00|
|52 Week Range|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||28.20%|
|Beta (5Y Monthly)||1.02|
|Expense Ratio (net)||0.18%|
Value stock exchange traded funds that track stable fundamentals and subpar valuations have not been this cheap relative to the broader markets in years. According to Bank of America, value stocks are ...
DEEP DIVE Mark Hulbert, a MarketWatch columnist and stock market analyst with decades of experience, published an article that takes a balanced look at recent evidence that growth strategies may be replaced by value.
The great rotation in equity markets into value stocks continues apace and if investors on Wall Street have been uncertain about its durability, the performance of at least one popular ETF over the past three months may deliver a lasting impression.
The extended bull run saw growth and momentum-focused equities build a large lead on value-oriented equities, but that’s starting to change and more upside could be ahead for value-focused ETFs. QMA, a quantitative equity and multi-asset manager that is part of Prudential Financial’s investment management business, is expecting cheap equities relative to their value to outperform more expensive equities. “It looks like we’re going through a bubble every bit as big as the tech bubble was, every bit as big as in the global financial crisis, but it’s happening much more under the radar,” said Andrew Dyson, chairman, and CEO of QMA.
Value-oriented ETFs are beginning to pull ahead, but some investors remain skeptical of a full on rotation and attribute the sudden shift as a short-term blip. In the recent market rebound, value stocks have been outpacing the market. Big value fund managers, including those from Hillman Funds, Artisan Partners and Eaton Vance, revealed they are taking the rally in value stocks to selloff some of their best performers in exchange for those that are further out of favor, reflecting views that the market shift to value will not last, Reuters reports.
“(Value) seems to have had a precipitous resurrection following years of significant underperformance,” said Maxwell Grinacoff, a derivatives and quantitative strategist at Macro Risk Advisors. Vanguard Value ETF (VTV) : seeks to track the performance of a benchmark index that measures the investment return of large-capitalization value stocks. The fund employs an indexing investment approach designed to track the performance of the CRSP US Large Cap Value Index, a broadly diversified index predominantly made up of value stocks of large U.S. companies.
According to the latest report on exchange-traded fund (ETF) flow data from State Street Global Advisors, value was able to outdo growth during the month of June, but the former still has the advantage year-to-date. "Given that US equities were in net inflows, the size and style category was largely the same with inflows throughout," wrote Matthew Bartolini, CFA Head of SPDR Americas Research State Street Global Advisors, in the report. "Growth funds outpaced value, as flows followed returns.
Several months ago, State Street Corporation's (STT) State Street Global Advisors (SSgA), the third largest U.S. issuer of exchange-traded funds (ETFs), made its presence felt in the ongoing ETF fee battle in significant fashion. The SPDR Portfolio ETFs, which SSgA debuted in October, are a suite of 15 previously existing SPDR ETFs that now carry ultra-low fees.
Buying stocks on the cheap relative to their value and then holding them for an extended duration has been the impetus for value investing. With investing icons like Warren Buffett popularizing the strategy, it's difficult to not consider value investing as part of one's portfolio, but with the bull market still in its extended phase and investors basking in the sunlight of growth, are they ready to completely bury value? In the past five years, IVE has been lagging the broader market thanks to an environment where low interest rates have been dominant.
Value investing seek to capitalize on inefficiencies in the market and have the potential to deliver higher returns with lower volatility compared with growth and blend counterparts.
The stock market has staged an epic rally to start 2019, and leading the charge for the market has been growth stocks. Year-to-date, the S&P 500 is up 17.5%. Meanwhile, the iShares S&P 500 Growth ETF (NYSE:IVW) is up 19%, while the iShares S&P 500 Value ETF (NYSE:IVE) is up 16%. Thus, stocks are up big in 2019, and growth stocks have broadly outperformed value stocks. There are many reasons why investors have returned to the growth trade in 2019. For starters, the economy has stabilized and even improved amid healthier China-U.S. trade relations. When the economy is healthy, investors tend to pile into risk-on, growth-oriented investments. Of equal importance, the Fed reversed its stance from "hike at all costs" to "wait and see". This stance reversal has kept rates low, and low rates help support growth valuations. Also, secular growth trends in markets like cloud, data, AI and digital ads are hardly slowing.Long story short, the growth trade is not dead. Considering that the Fed projects to remain dovish, U.S.-China trade relations project to improve, and secular growth trends project to remain healthy, then the growth trade projects to remain alive and well for the remainder of 2019.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe big takeaway? Stick with growth stocks. They've led the market higher over the past several years. They are leading the market higher today. And, they will continue to lead the market higher for the foreseeable future. * 7 Strong Buy Stocks That Tick All the Boxes With that in mind, let's take a look at six growth stocks to buy for the rest of the 2019. Facebook (FB)Source: Shutterstock The Long-Term Bull Thesis: The reasons to leave the Facebook (NASDAQ:FB) ecosystem were as strong as they will ever be in 2018 amid a plethora of data privacy scandals, and the company still added users. Net takeaway? Consumers are addicted to Facebook as much as they are addicted to the internet. Consequently, users aren't going to go away any time soon. Neither will advertisers, since they follow consumers. As such, Facebook's secular digital ad growth narrative remains robust. On top of that, the company is building out a complementary growth vertical in e-commerce. Overall, then, the growth trajectory at Facebook remains healthy, meaning that FB stock will only grind higher in the long run.The 2019 Bull Thesis: One of the biggest knocks against Facebook stock over the past few years has been that the company is entirely reliant on digital advertising and that the digital ad market will eventually slow. But that narrative will change in 2019. Over the next few quarters, we will see a new e-commerce growth narrative emerge. The emergence of that narrative will do two things. One, it will ease concerns related to slowing digital ad growth rates. Two, it will pave the path for 20%-plus growth to persist for a lot longer. Both of those developments will provide tailwinds for FB stock, and consequently, shares should stay in rally mode for the rest of 2019. Chegg (CHGG)Source: Shutterstock The Long-Term Bull Thesis: Digital education is the future. It only makes sense that as information migrates online, students increasingly turn towards online learning solutions to help them learn. But, at the current moment, there is no universal connected learning platform at scale. Chegg (NASDAQ:CHGG) is in the early days of becoming that. From homework solutions to on-demand tutors to test prep, Chegg provides a variety of learning tools through its all-in-one connected learning platform. Right now, Chegg only has 3.1 million subs, out of 36 million high school and college students in the U.S. Thus, the runway for growth is quite large, giving CHGG stock compelling long term upside potential. * 7 Stocks Worth Buying When They're Down The 2019 Bull Thesis: Chegg stock just dropped big on disappointing first-quarter numbers. But those numbers will get better as the year progresses. It's tough for me to believe that the recent college cheating scandal won't create a huge boost for Chegg's business come test prep time in the back half of 2019, as parents start spending more on college test prep amid what will likely become a more intense and rigorous college admissions process. Consequently, I expect to see Chegg's numbers get a lot better as the year progresses, and this improvement should get CHGG stock back on a medium to long-term uptrend. Weibo (WB)Source: Shutterstock The Long-Term Bull Thesis: The long-term bull thesis on Weibo (NASDAQ:WB) is pretty straight forward. Weibo is China's Twitter (NYSE:TWTR). But, Weibo has more users than Twitter, and operates at higher margins than Twitter. The only thing the company doesn't do as well is monetize each individual user, and that's likely a function of maturity (Twitter is three years older than Weibo). Eventually, Weibo will monetize each user at Twitter-like levels, meaning the company will have more users, more revenue, and more profits. Naturally, that should mean a bigger market cap, too. But, Weibo currently has a market cap about half the size of Twitter. Thus, long term upside potential is compelling.The 2019 Bull Thesis: The 2019 bull thesis in Weibo stock is likewise straightforward. Nothing Weibo did in 2018 warranted the huge selloff in WB stock. The numbers broadly remained very healthy. The only things that did happen were China's economy slowed meaningfully, trade tensions escalated, and the dollar strengthened. In 2019, China's economy is improving, trade tensions have eased, and the dollar has weakened. Thus, 2018 headwinds have turned in 2019 tailwinds. Ultimately, that should spark a big rally in WB stock into the end of the year. Square (SQ)Source: Via SquareThe Long-Term Bull Thesis: We are moving from a world of cash transactions, to a world of cashless transactions, and through facilitating various brick-and-mortar and e-commerce cashless transactions, Square (NYSE:SQ) is at the heart of this pivot. The company's gross payment volume as percent of global retail sales remains tiny. They are gaining traction among larger sellers. Growth rates remain robust. Margins are marching higher. The ecosystem is expanding with things like Cash App, Online Store, and Invoices. Overall, then, all signs here indicate that Square will continue to become a bigger and bigger player in the global retail scene over the next several years. As that happens, SQ stock will head higher. * 7 Marijuana Stocks That Are Bleeding Cash The 2019 Bull Thesis: SQ stock looks like a strong "buy the dip" candidate for the back half of 2019. This stock was crushed recently on weaker-than-expected Q1 numbers. But the numbers weren't that bad, and they should improve through the balance of 2019 as the global economy stabilizes and new e-commerce initiatives provide a healthy tailwind to growth. As such, things will get better for Square over the next few months, and as they do, SQ stock will rebound in a big way. iRobot (IRBT)Source: Shutterstock The Long-Term Bull Thesis: When it comes to iRobot (NASDAQ:IRBT), the long-term bull thesis hinges on the idea that the automation wave will ultimately sweep across the entire consumer household products space. iRobot started by selling robotic vacuum cleaners. Then, they got into robotic pool cleaners and mops. Now, they are getting into robotic lawnmowers. Next, they'll dive into robotic car cleaners, window cleaners, so on and so forth. In other words, this company expands its addressable market almost every year by introducing a new consumer robotics product. This trend will persist for the next several years as consumer robotics become the household norm. Ultimately, then, iRobot will benefit from huge revenue and profit growth in a long term window.The 2019 Bull Thesis: The reason to buy IRBT stock for the rest of 2019 is because this stock is due for a major bounce-back. IRBT stock was killed in late April on poor Q1 numbers. But, poor Q1 numbers are an anomaly, not the trend. Over the next several quarters, new product launches -- including the robotic lawnmower -- will drive improved results at iRobot, and that improvement will power a huge recovery rally in IRBT stock. Growth Stocks to Buy: Canopy Growth (CGC)Source: Shutterstock The Long-Term Bull Thesis: The growth potential in the cannabis space is enormous. At scale, the cannabis market will be as large, if not larger than, the global alcoholic beverage and tobacco markets. Both of those markets measure well above $500 billion, and they've each spawned multiple $100 billion-plus companies. Who will be the $100-billion plus giant in the cannabis space? Canopy Growth (NYSE:CGC). For three reasons. One, the company is already the leader in the legal Canada market by a mile. Two, they have $4 billion on the balance sheet which they are using strategically and aggressively to extend global dominance. Three, they are positioned to dominate the U.S. market, too, with the recent acquisition of Acreage. * Why I Regret Buying Cronos Group Stock The 2019 Bull Thesis: CGC stock should breakout into the end of the year for two big reasons. One, U.S. legislation is increasingly moving towards nationwide legalization of cannabis. As we inch closer to that landmark legislation, CGC stock will creep higher, given its Acreage acquisition. Two, the Canadian cannabis market is finally starting to stabilize after early volatility amid supply shortages. With those shortages in the rear-view mirror, the market should grow steadily, Canopy's numbers should improve meaningfully, and CGC stock should rise.As of this writing, Luke Lango was long FB, CHGG, WB, SQ, IRBT, and CGC. Compare Brokers The post 6 Growth Stocks to Buy for the Rest of 2019 appeared first on InvestorPlace.
A version of this article appeared in the March 2019 issue of Morningstar ETFInvestor. The concept of value investing dates back at least as far as the 1920s, when Benjamin Graham and David Dodd first began teaching finance at Columbia University. The fundamental principles of value investing were later enshrined in the duo's classic “Security Analysis,” first published in 1934. The idea is painfully simple: Buy securities at prices below their intrinsic value and wait patiently for their market price to reflect their true worth.
The iShares S&P 500 Value ETF (IVE) , one of the largest exchange traded funds dedicated to value stocks, posted an admirable first-quarter gain of more than 11%. “Immediately after the Fed’s announcement, value stocks—the market’s cheapest—were crushed,” reports Evie Liu for Barron's. “The valuation spread between the market’s cheapest stocks and the most expensive ones has risen to the widest level in the past 70 years.
Sector exposures always matter with equity-based exchange traded funds and that is particularly true of factor-driven strategies, such as growth and value. Factor ETFs typically feature different sector ...