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Feast With These Stocks And ETFs On Thanksgiving
We are barely a few hours away from Thanksgiving Day which kick starts the one month-long holiday season. While most Americans warm up for their annual shopping gala on the fourth Thursday of November every year – which goes by giving thanks for all good things in life – the day mainly calls for celebratory meals with family and friends, at home or outside. This year, savings on gas stations thanks to cheap oil prices, an improving job market and still-contained inflation should lay a copious spread on the Thanksgiving table. How Pricey Are Thanksgiving Meals This Year? The national average cost of a Thanksgiving feast last year tallied $49.41 , as per the American Farm Bureau Federation. Though the Farm Bureau survey indicated that this cost stayed the same or somewhat declined from the prior year and moved along the consumer price index, ‘the average cost of Thanksgiving dinner for 10 people’ will likely cross $50 for the first time in 2015 since the agency started following the data. The spike in the price of turkey, the focus of the dining table, thanks to a supply crunch caused by bird flu is mainly behind the expected rise in cost. But, industry experts also believe that on an inflation-adjusted basis, prices are quite reasonable. Moreover, this year, consumers can also import fruits , vegetables, wines and cheeses at cheaper prices thanks to a soaring greenback. Yields of corn, wheat and soybeans are also abundant. As per USDA ‘s projection in October, all food price index is up 1.7% so far in 2015, below the 20-year historical average of 2.6%. Food away from home inflation is 2.5% this year against the 2.7% historical average while food at home inflation is just 1.1%, drastically lower than the historical average of 2.6%. In any case, restaurant industry sales are projected to peak in 2015 with a record high of $709.2 billion, representing the sixth successive year of real expansion in restaurant sales, per National Restaurant Association. If online sales are considered, Thanksgiving Day is expected to see an 18% year-over-year rise to $1.6 billion. It will be the ‘fastest growing online sales day for the second consecutive year’, per Adobe . So food and beverage companies are pinning their hopes on this Thanksgiving for huge profits. This is a key business-boosting occasion for these stocks and the related ETFs. Let’s take a look at the stocks and ETFs investors can gobble up for some gains throughout the holiday season. Stock Picks B&G Foods Inc. (NYSE: BGS ) The company makes and markets packed and easy-to-store food and household products. Its products basket carries hot cereals, fruit spreads, canned meats and beans, bagel chips, spices, seasonings, hot sauces, wine vinegar, Mexican-style sauces, pickles, peppers, salad dressings, dry soups, puffed corn and rice snacks and many more. The list clearly indicates why the stock should be a hit on Thanksgiving. B&G has a Zacks Rank #1 (Strong Buy) and is up over 23% so far this year (as of November 24, 2015). Constellation Brands Inc. (NYSE: STZ ) The company, along with its subsidiaries, brews and markets beer, wine, and spirits in North America, Mexico, New Zealand and Italy. Wine’s compatibility with turkey at Thanksgiving dinner has put this company in focus. Constellation Brands has a Zacks Rank #2 (Buy) and a Growth score of ‘A’. STZ is up over 44% so far this year. The Kroger Co. (NYSE: KR ) Kroger, with its subsidiaries, operates as a retailer in the U.S. and abroad. It is the manufacturer and processor of food that is sold in its supermarkets. Kroger has a Zacks Rank #2, a Growth score of ‘B’ and a Value Score of ‘B’. KR is up about 16% so far this year. Ruth’s Hospitality Group Inc. (NASDAQ: RUTH ) The restaurateur’s Chris Steak House concept is among the bunch of eateries, which will remain open on Thanksgiving. The Florida-based company has a Zacks Rank #2 and a Value score of ‘A’. The stock is up over 15%. ETF Picks PowerShares Dynamic Food & Beverage Portfolio ETF (NYSEARCA: PBJ ) This product offers exposure to the stocks that are engaged in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies. The $244.3-million ETF puts about 5% weight in Starbucks (NASDAQ: SBUX ), PepsiCo (NYSE: PEP ), Kroger, Mondelez (NASDAQ: MDLZ ) and Sysco (NYSE: SYY ) each. PBJ charges 58 bps in fees and is up 7.4% in the year-to-date frame (as of November 24, 2015). PBJ has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. The Restaurant ETF (NASDAQ: BITE ) This is a new ETF that gives investors access to the ‘food-away-from’ industry. No stock accounts for more than 3.09% weight of the 45-stock portfolio. At present, McDonald’s (NYSE: MCD ) takes the top spot. BITE charges 75 bps in fees. Market Vectors-Agribusiness ETF (NYSEARCA: MOO ) This $963-million ETF gives investors exposure to the overall performance of the global agribusiness industry. The U.S. makes up over half of the basket. Stocks like Monsanto (NYSE: MON ) and Syngenta (NYSE: SYT ) take over 8% each in the fund. MOO charges 57 bps in fees and is down 7.8% so far this year. Consumer Staples Select Sector SPDR ETF (NYSEARCA: XLP ) This is the most popular consumer ETF with about $7.8 billion of assets. The fund charges 14 bps in fees per year from investors. Food & Staples Retailing takes over 24% of the basket followed by beverages with over 21% weight. Food products take about 15.8% of the fund. XLP is up about 2.4% and has a Zacks ETF Rank #3 with a Medium risk outlook. Original Post
Best And Worst Q3’15: Large Cap Growth ETFs, Mutual Funds And Key Holdings
Summary The Large Cap Growth Style ranks fourth in Q3’15. Based on an aggregation of ratings of 24 ETFs and 622 mutual funds. QUAL is our top-rated Large Cap Growth ETF and FLGEX is our top-rated Large Cap Growth mutual fund. The Large Cap Growth style ranks fourth out of the 12 fund styles as detailed in our Q3’15 Style Ratings for ETFs and Mutual Funds report. It gets our Neutral rating, which is based on an aggregation of ratings of 24 ETFs and 622 mutual funds in the Large Cap Growth style. See a recap of our Q2’15 Style Ratings here. Figures 1 and 2 show the five best and worst-rated ETFs and mutual funds in the style. Not all Large Cap Growth style ETFs and mutual funds are created the same. The number of holdings varies widely (from 21 to 683. This variation creates drastically different investment implications and, therefore, ratings. Investors seeking exposure to the Large Cap Growth style should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2. Figure 1: ETFs with the Best & Worst Ratings – Top 5 (click to enlarge) * Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings The State Street Systematic Growth Equity ETF (NYSEARCA: SYG ) and the Direxion iBillionaire Index ETF (NYSEARCA: IBLN ) were excluded from Figure 1 because its total net assets are below $100 million and do not meet our liquidity minimums. Figure 2: Mutual Funds with the Best & Worst Ratings – Top 5 (click to enlarge) * Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings The iShares MSCI USA Quality Factor ETF (NYSEARCA: QUAL ) is the top-rated Large Cap Growth ETF and the Fidelity Large Cap Growth Enhanced Index Fund (MUTF: FLGEX ) is the top-rated Large Cap Growth mutual fund. Both earn a Very Attractive rating. The Columbia Select Large Cap Growth ETF (NYSEARCA: RWG ) is the worst-rated Large Cap Growth ETF and the Quaker Strategic Growth Fund (MUTF: QUAGX ) is the worst-rated Large Cap Growth mutual fund. RWG earns a Neutral rating and QUAGX earns a Very Dangerous rating. Verizon Communications, Inc. (NYSE: VZ ) is one of our favorite stocks held by Large Cap Growth funds and earns our Attractive rating. Since 2006, Verizon has grown after-tax profit ( NOPAT ) by 6% compounded annually. When including Verizon’s quarterly results this year, NOPAT is up an additional 8% on a trailing-twelve month basis. Verizon currently earns a return on invested capital ( ROIC ) of 8% and has increased its NOPAT margin to 16% from 13% in 2006. The market is not giving Verizon the credit it deserves for its consistent business operations, and the stock is undervalued. At its current price of $47/share, Verizon has a price to economic book value ( PEBV ) ratio of 0.8. This ratio implies that the market expects Verizon’s profits to decline permanently by 20%. If Verizon can grow NOPAT by 4% compounded annually for the next five years , the stock is worth $73/share – a 55% upside. Adobe Systems, Inc. (NASDAQ: ADBE ) is one of our least favorite stocks held by Large Cap Growth funds and earns our Dangerous rating. The company’s NOPAT has fallen by 28% compounded annually since 2011 and coincides with NOPAT margin falling to 10% from 29% over the same time frame. Adobe currently earns a 6% ROIC which is just a third of the 18% earned in 2011. However, the stock remains overvalued and does not reflect the company’s recent profit struggles. To justify the current price of ~$85/share, Adobe must grow NOPAT by 22% compounded annually for the next 20 years . Adobe has definitely seen better days, owning the stock and betting on such high growth for another two decades seems unrealistic. Figures 3 and 4 show the rating landscape of all Large Cap Growth ETFs and mutual funds. Figure 3: Separating the Best ETFs From the Worst Funds (click to enlarge) Sources: New Constructs, LLC and company filings Figure 4: Separating the Best Mutual Funds From the Worst Funds (click to enlarge) Sources: New Constructs, LLC and company filings D isclosure: David Trainer and Max Lee receive no compensation to write about any specific stock, style, style or theme. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…) I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.