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The Q2 earnings season is now about to end with 83.1% of the S&P 500 companies having reported already. The overall picture was not quite bright as growth for both earnings and revenues was negative in the quarter. Earnings fell 2.4% year over year while weakness in revenues was more acute with a 4.1% annual rate of decline (as per the Zacks Earning Trends issued on August, 2015). Companies found it hard to even match the already conservative top-line estimates. When everything points toward utter sluggishness, investors must be looking for specific stocks or sectors that somehow managed to outperform, snapping the downing trend. Though the entire season is all about earnings, how about looking at sales more precisely? After all, sales are harder to influence in an income statement than earnings. A company can end up scoring decent earnings by adopting cost-cutting or refinancing its credit facility which in turn lowers interest expenses. But investors should note that these activities do not represent the companies’ prime purpose – sales generation. So, it appears more analytical to assess through a company’s sales per share rather than earnings per share. This is truer given the fact that it is harder for a company to shape up revenue figures by some other measure. MarketWatch recently highlighted 10 S&P 500 companies that exhibited the speediest sales growth in the last reported quarter. To do so, the author calculated sales per share of the latest quarter and then measured its rate of growth from the sales per share in the year-ago quarter. While this approach surely presents investors a set of stocks to keep a close eye on, they can also consider the ETF or basket approach for risk minimization purpose. For that, we highlight ETFs considerably invested in those stocks. Housing D.R. Horton (NYSE: DHI ) , one of the biggest and well-known homebuilders in the nation, topped the list provided by MarketWatch having recorded 37% growth in sales per share. This Zacks Rank #2 (Buy) stock has Growth and Momentum Style Score of ‘A’. On the other hand, Lennar Corporation (NYSE: LEN ) a Zacks Rank #1 (Strong Buy) firm in the Residential Construction space, recorded 30% sales per share growth in its most recent quarter and occupied the sixth spot. Both stocks have considerable exposure of at least 11% in the iShares U.S. Home Construction ETF (NYSEARCA: ITB ) . Another housing ETF SPDR Homebuilders ETF (NYSEARCA: XHB ) also invests over 3% in each stock. In any case, the housing sector shaped up well in recent months. The Key constituents’ sturdy sales performance makes these funds worth noting. Both funds have a Zacks ETF Rank #3 (Hold). Health Care Who does not know about the robust health of the health care stocks and funds? Merger and acquisition frenzy, encouraging industry fundamentals and promising new drugs sent the sector on cloud nine these days. Quite expectedly, stocks from health care sectors will hit the list of ‘fastest sales growth’. The Zacks Rank #1 Gilead Sciences (NASDAQ: GILD ) put up 36% sales growth. The stock, with Growth and Value Style Scores of ‘B’ has hefty shares in the Market Vectors Biotech ETF (NYSEARCA: BBH ) and the iShares Nasdaq Biotechnology ETF (NASDAQ: IBB ) with about 16% and 8%, respectively. Though biotech stocks and ETFs recently fell out of investors’ favor possibly on overvaluation concerns, the space should bounce back after the correction. BBH has a Zacks ETF Rank #1 while IBB carries a Zacks ETF Rank #2. Technology Though the tech sector was on a roller-coaster ride this earnings season and some major tech companies were badly beaten down post earnings, much of the downside was largely the result of lofty expectations. At least for the tech monster Apple (NASDAQ: AAPL ) , the scenario looked like this. The company had some issues with some of its key products and their sales momentum, but still saw sales per share growth of 36%. This Zacks Rank #2 (Buy) stock has compelling indicators of Growth and Value scores of ‘A’ and Momentum score of ‘B’. Investors can easily play this stock via the iShares Dow Jones US Technology ETF (NYSEARCA: IYW ) , the Technology Select Sector SPDR ETF (NYSEARCA: XLK ) and the Vanguard Information Technology ETF (NYSEARCA: VGT ) . All three are Buy rated. Link to the original post on Zacks.com Scalper1 News
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