|Bid||118.33 x 300|
|Ask||118.36 x 200|
|Day's Range||117.51 - 118.54|
|52 Week Range||101.53 - 126.54|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.44%|
I saw an article about sector exchange-traded funds recently. While the author was talking about the 11 different S&P 500 sectors and how you can trade each of them using State Street SPDRs, it got me wondering about all the other sector ETFs to own in the marketplace.
Berkshire Hathaway (BRK.B) stock has fallen ~6.8% in the last month, and it’s risen 16.9% in the past year. In comparison, the S&P 500 Index (SPY) has fallen 5.5% over the last month and risen 10.9% over the last year.
The insurance sector (IYF) has seen underwriting losses in 2H17 mainly due to higher claims resulting from hurricanes and other calamities. This has led to higher insurance revenues for many companies, including Berkshire Hathaway (BRK.B). Underwriting losses will largely depend upon claims arising in the upcoming quarters.
In 1Q18, Berkshire Hathaway (BRK.B) is expected to post EPS (earnings per share) of $3,115, a rise of 44% on a YoY (year-over-year) basis aided by lower taxes, targeted efficiencies in BNSF, and an expected decline in claims from its insurance business. Berkshire is expected to see a 9.9% fall in its top line to $58.7 billion in 1Q18 due to subdued growth in underwriting fees and the services sector. In 4Q17, Berkshire posted EPS of $2,029, which were affected by underwriting losses and the subdued performance of its energy subsidiary.
The Trump administration appears to have initiated trade wars with China, Canada, and other countries in order to counter rising imports and encourage domestic manufacturing. The administration’s efforts to lower taxes, meaning fewer regulations for mid- and small-size financial companies, are directed toward reducing the fiscal deficit by encouraging domestic manufacturing and exports. The bank could benefit by improving its credit offtake amid demand from the manufacturing sector for capacity augmentation.
Investors who are overweight U.S. equity market exposure may want to consider a sector rotation strategy that favors financials and technology sector ETFs in the rising interest rate environment ahead. ...
The Senate recently passed a bill to loosen some of the more draconian regulatory restrictions placed on banks in response to a post-financial downturn environment, potentially giving financial stocks ...
Overall, the industry has faced criticism of lower payouts, largely due to select banks’ stress-test failure in recent years. Citigroup (C) has been rewarding investors with dividends and repurchases as its profitability and margins have improved.
Banks (IYF) enjoyed a strong run in 2016 and 2017 helped by higher rates driving NIMs (net interest margins), expansion of asset management activity, higher inflows, strategic transaction advisory, and trading activity. EPS growth of 8% in 1Q18 can be helped by lower operating losses, higher net interest margins, and an expected pickup in credit offtake.
Wells Fargo (WFC) has seen its expenses rise in recent quarters on litigation accruals due to mortgage regulatory investigations, account sales practices, and other matters related to retail and corporate clients. Other banks (IYF) including Goldman Sachs (GS), JPMorgan Chase (JPM), and Bank of America (BAC) saw their spending rise in 4Q17 primarily due to higher compensation. Wells Fargo’s 4Q17 non-interest expense of $16.8 billion included operating losses of $3.5 billion, up from $1.3 billion in 3Q17.
The era of rate hikes since December 2015 has proven to be beneficial for commercial banks (IYF). Net interest margins have risen due to a difference between the cost of funds raised and money that was loaned. As rates steepen—with the federal funds rate at 1.5% and the Federal Reserve hinting at another three or four rate hikes in 2018—credit offtake can slow amid lower tax rates.