Tag Archives: growth

Best And Worst Q3’15: Small Cap Growth ETFs, Mutual Funds And Key Holdings

Summary The Small Cap Blend style ranks eleventh in Q3’15. Based on an aggregation of ratings of 11 ETFs and 353 mutual funds. SLYG is our top-rated Small Cap Growth ETF and VSCRX is our top-rated Small Cap Growth mutual fund. The Small Cap Growth style ranks eleventh out of the 12 fund styles as detailed in our Q3’15 Style Ratings for ETFs and Mutual Funds report. It gets our Dangerous rating, which is based on an aggregation of ratings of 11 ETFs and 353 mutual funds in the Small Cap Growth style as of July 20, 2015. See a recap of our Q2’15 Style Ratings here. Figure 1 ranks from best to worst the eight small-cap growth ETFs that meet our liquidity standards and Figure 2 shows the five best and worst-rated small-cap growth mutual funds. Not all Small Cap Growth style ETFs and mutual funds are created the same. The number of holdings varies widely (from 29 to 1218). This variation creates drastically different investment implications and, therefore, ratings. Investors seeking exposure to the Small Cap Growth style should buy one of the Attractive-or-better rated mutual funds from Figure 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 Vanguard S&P Small-Cap 600 Growth ETF (NYSEARCA: VIOG ) and the PowerShares Russell 2000 Pure Growth Portfolio ETF (NYSEARCA: PXSG ) are excluded from Figure 1 because their 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 Managed Portfolio Smith Group Small Cap Focused Growth Fund ( SGSNX , SGSVX ) is excluded from Figure 2 because its total net assets are below $100 million and do not meet our liquidity minimums. The State Street SPDR S&P 600 Small Cap Growth ETF (NYSEARCA: SLYG ) is the top-rated Small Cap Growth ETF and the Virtus Small Cap Core Fund (MUTF: VSCRX ) is the top-rated Small Cap Growth mutual fund. SLYG earns a Neutral rating and VSCRX earns an Attractive rating. The iShares Russell 2000 Growth ETF (NYSEARCA: IWO ) is the worst-rated Small Cap Growth ETF and the Alpine Small Cap Fund (MUTF: ADIAX ) is the worst-rated Small Cap Growth mutual fund. IWO earns a Dangerous rating and ADIAX earns a Very Dangerous rating. Methode Electronics, Inc. (NYSE: MEI ) is one of our favorite stocks held by Small Cap Growth funds and earns our Very Attractive rating. Since 2009, the company has grown after-tax profit ( NOPAT ) by 61% compounded annually. Methode Electronics currently earns a top-quintile return on invested capital ( ROIC ) of 23% and boasts an impressive 12% NOPAT margin. Weak quarterly guidance caused an overblown decline of 50% in the stock in early July. We think MEI is undervalued. At the current price of $27/share, Methode Electronics has a price to economic book value ( PEBV ) ratio of 0.9. This ratio implies that the market expects the company’s profits to permanently decline by 10%. If Methode Electronics can grow NOPAT by just 5% compounded annually for the next five years , the stock is worth $33/share today – a 22% upside. Healthways Inc. (NASDAQ: HWAY ) is one of our least favorite stocks held by Small Cap Growth funds and earns our Dangerous rating. The company’s NOPAT has fallen by 28% compounded annually since 2010. ROIC dropped to a bottom-quintile 3% from 8% over the same time period. Healthways’ business fundamentals are showing signs of weakness. In stark contrast, the stock price reflects quite sanguine expectations about future cash flows. To justify the current price of $12/share, Healthways must grow NOPAT by 12% compounded annually for the next 14 years . Expecting Healthways not only to reverse its profit decline but also sustain such levels of profit growth for over a decade seems highly optimistic and risky. Figures 3 and 4 show the rating landscape of all Small 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.

Best And Worst Q3’15: Mid Cap Growth ETFs, Mutual Funds And Key Holdings

Summary The Mid Cap Growth style ranks eighth in Q3’15. Based on an aggregation of ratings of 11 ETFs and 382 mutual funds. MDYG is our top-rated Mid Cap Growth ETF and IMIDX is our top-rated Mid Cap Growth mutual fund. The Mid Cap Growth style ranks eighth 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 11 ETFs and 382 mutual funds in the Mid 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 Mid Cap Growth style ETFs and mutual funds are created the same. The number of holdings varies widely (from 23 to 626). This variation creates drastically different investment implications and, therefore, ratings. Investors seeking exposure to the Mid 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 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 State Street SPDR S&P 400 Mid Cap Growth ETF (NYSEARCA: MDYG ) is the top-rated Mid Cap Growth ETF and the Professionally Managed Portfolios Congress Mid Cap Growth Fund (MUTF: IMIDX ) is the top-rated Mid Cap Growth mutual fund. Both earn an Attractive rating. The QuantShares U.S. Market Neutral Momentum Fund ETF (NYSEARCA: MOM ) is the worst-rated Mid Cap Growth ETF and the Starboard Investment Goodwood SMID Cap Discovery Fund (MUTF: GAMAX ) is the worst-rated Mid Cap Growth mutual fund. MOM earns a Neutral Rating and GAMAX earns a Very Dangerous rating. The Buckle, Inc. (NYSE: BKE ) is one of our favorite stocks held by Mid Cap Growth funds and earns our Very Attractive rating. Over the past decade, the company has grown after-tax profit (NOPAT) by 14% compounded annually. The company currently earns a top-quintile return on invested capital ( ROIC ) of 32%, which is more than double the 15% earned in 2005. Furthermore, Buckle has maintained a steady NOPAT margin of 15% for the past six years. Despite the fundamental strength of the business, its stock remains undervalued. At the current price of $40/share, Buckle has a price to economic book value ( PEBV ) ratio of 0.0. This ratio implies that the market expects Buckle’s profits to permanently decline by 20%. While the retail sector has its ups and downs, this low expectation ignores the profitability Buckle has maintained over its lifetime. If the company can grow NOPAT by just 6% compounded annually for the next ten years , the stock is worth $74/share – an 85% upside. ServiceNow (NYSE: NOW ) is one of our least favorite stocks held by Mid Cap Growth funds and earns our Dangerous rating. Much like other cloud companies we have covered, ServiceNow has never turned a profit since going public. NOPAT declined from -$30 million in 2012 to -$141 million in 2014. On top of falling profits, the company earns a bottom-quintile ROIC of -74%. Investors are ignoring these fundamental issues in favor of misleading revenue growth, and the stock remains overvalued as a result. To justify the current price of $69/share, ServiceNow must immediately achieve a positive pre-tax (NOPBT) margin of 10% (compared to -21% in 2014) and grow revenue by 31% compounded annually for the next 15 years . We feel the expectations embedded in NOW are far too optimistic. Figures 3 and 4 show the rating landscape of all Mid 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.

5 Large-Cap Growth Mutual Funds For High Yield

Growth funds focus on realizing an appreciable amount of capital growth by investing in stocks of firms whose value is projected to rise over the long term. However, a relatively higher tolerance to risk and the willingness to park funds for the longer term are necessary when investing in these securities. This is because they may experience relatively more price fluctuations than other fund classes. Meanwhile, large-cap funds are an ideal investment option for investors looking for high return potential that comes with lower risk than small-cap and mid-cap funds. These funds have exposure to large-cap stocks, providing long-term performance history and assuring more stability than what mid caps or small caps offer. Below we will share with you 5 buy-rated large-cap growth mutual funds. Each has earned either a Zacks Mutual Fund Rank #1 (Strong Buy) or a Zacks Mutual Fund Rank #2 (Buy) as we expect these mutual funds to outperform their peers in the future. Consulting Group Large Cap Growth (MUTF: TLGUX ) seeks capital growth. TLGUX invests a lion’s share of its assets in large-cap companies having market capitalizations similar to those included in the Russell 1000 Growth Index. TLGUX may invest a maximum of 10% of its assets in foreign securities that are not traded in the US. TLGUX may also opt for lending its portfolio for generating additional income. The Consulting Group Large Cap Growth fund has a three-year annualized return of 15.1%. TLGUX has an expense ratio of 0.67% as compared to category average of 1.18%. BlackRock Capital Appreciation Investor A (MUTF: MDFGX ) predominantly invests in common stocks of domestic companies that are believed to have impressive earnings growth potential. MDFGX invests a minimum of 65% of its assets in equity securities. Though MDFGX invests in securities of companies irrespective of their market capitalizations, MDFGX focuses on acquiring securities of large- and mid-cap companies. The BlackRock Capital Appreciation Investor A fund has a three-year annualized return of 14.9%. Lawrence G. Kemp is the fund manager and has managed MDFGX since 2013. Bridgeway Large-Cap Growth (MUTF: BRLGX ) seeks total return with capital growth. BRLGX invests a large chunk of its assets in large-cap companies having strong growth prospects and which are traded in the U.S. Advisors select stocks on the basis of statistical analysis. The Bridgeway Large-Cap Growth fund has a three-year annualized return of 19.3%. As of June 2015, BRLGX held 110 issues with 2.25% of its assets invested in HCA Holdings Inc. Glenmede Large Cap Growth (MUTF: GTLLX ) invests a major portion of its assets in domestic large-cap firms having market capitalizations similar to those included in the Russell 1000 Index. GTLLX seeks long-term total return and focuses on acquiring common stocks of companies. The Glenmede Large Cap Growth fund has a three-year annualized return of 18.9%. GTLLX has an expense ratio of 0.88% as compared to category average of 1.18%. JPMorgan Large Cap Growth A (MUTF: OLGAX ) seeks long-term capital growth. OLGAX invests a majority of its assets in securities of well-known large-cap companies. OLGAX emphasizes in investing in equity securities of companies having market capitalizations identical to those listed in the Russell 1000 Growth Index. The JPMorgan Large Cap Growth A fund has a three-year annualized return of 14.5%. Giri Devulapally is the fund manager and has managed OLGAX since 2004. Original Post Share this article with a colleague