nysearcappa – Scalper1

Aerospace & Defense And New Zealand: 2 ETFs To Watch On Outsized Volume

In the last trading session, U.S. stocks fell on uncertainty related to the U.S. rate hike and disappointing results from Ford Motor Co. (NYSE: F ) and other companies. As for the top ETFs, investors saw both the SPDR S&P 500 Trust ETF (NYSEARCA: SPY ) and the SPDR Dow Jones Industrial Average ETF (NYSEARCA: DIA ) lose 0.2%, but the PowerShares QQQ Trust ETF (NASDAQ: QQQ ) moved higher by 0.2% on the day. Two more specialized ETFs are worth noting in particular as both saw trading volume far outside of normal. In fact, both these funds experienced volume levels that were more than double their average for the most recent trading session. This could make these ETFs the ones to watch in the days ahead to see if this trend of extra-interest continues. The PowerShares Aerospace & Defense Portfolio ETF (NYSEARCA: PPA ): Volume 9.6 times average This aerospace & defense ETF was in focus yesterday as around 370,000 shares moved hands on the day compared to an average of roughly 38,000 shares. We also saw some share price movement as shares of PPA rose 0.01% yesterday. The movement can largely be attributable to better-than-expected earnings and higher 2015 outlook from aerospace & defense majors Lockheed Martin Corp. (NYSE: LMT ) and The Boeing Co. (NYSE: BA ) last week. This favorably impacted the aerospace & defense equities that we find in this ETF portfolio. For the past one month, PPA was up 8.7%. It presently carries a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. The iShares MSCI New Zealand Capped ETF (NYSEARCA: ENZL ): Volume 4.8 times average This New Zealand capped ETF was in the spotlight as roughly 104,000 shares moved hands yesterday compared to an average of roughly 21,000 shares. ENZL rose 0.4% in the session. The move can be attributed to the continued rally in New Zealand stocks after European Central Bank’s indication of more stimulus measures to aid growth. ENZL went up 14.4% in the past one month though it currently has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook. Link to the original post on Zacks.com

Precision-Berkshire Deal Put These Aerospace ETFs In Focus

Precision Castparts Corp. (NYSE: PCP ) , one of the leading manufacturers of aerospace components, recently inked a merger agreement with Berkshire Hathaway Inc. (NYSE: BRK.A ) (NYSE: BRK.B ) under which the latter will buy the former in a $37.2 billion deal. Precision will formally join Berkshire in the first quarter of calendar year 2016, upon fulfillment of customary closing conditions. Investor cheer was reflected in the 19.1% upward movement seen in Precision shares on August 10. Post completion of the acquisition, Precision will maintain its name across the globe and will be represented as a wholly owned subsidiary of Berkshire Hathaway. The deal mattered so much to investors as it is the biggest so far in Berkshire’s history. This clearly indicated that Berkshire’s boss, Warren Buffett, finds great value latent in Precision. Berkshire Hathaway has maintained friendly terms with Precision Castparts for long, controlling a 3% stake in the latter. Berkshire Hathaway shares were hammered, but that was because of Standard & Poor’s intent of cutting the iconic conglomerate’s rating by a notch or two within the next 90 days. Yet, we expect the long-term prospects of the deal to be bright. Notably, the S&P is concerned about how Berkshire Hathaway will finance the deal. A two0notch downgrade would lower Berkshire Hathaway’s rating to “A-plus,” a medium investment grade, which in turn will lead to an increase in the company’s borrowing cost. Whatever the case, for Precision Castparts, the merger should bring strong synergies and introduce it to customers on a larger scale. Market Impact Shares of PCP jumped as much as 18.9% following the news. At the time of writing, Precision Castparts has a Zacks Rank #3 (Hold) and a value style score of ‘C’. The buyout deal also led to smooth trading in the aerospace ETF world. This trend is likely to continue if the deal is completed without interruption. Investors should definitely tap this opportune surge through the Precision-heavy aerospace ETFs. The stock has decent weight in the iShares U.S. Aerospace & Defense ETF (NYSEARCA: ITA ) and the PowerShares Aerospace & Defense Portfolio (NYSEARCA: PPA ) and thus we profile the duo below. ITA in Focus This fund follows the Dow Jones U.S. Select Aerospace & Defense Index, giving investors exposure to the broad aerospace and defense industry. With an asset base of $540.3 million, ITA is the largest player in this space. However, the fund trades in low volumes of roughly 35,000 shares a day and charges an annual fee of 44 basis points per year. The fund holds 36 securities in its basket with Precision Castparts taking the seventh spot with a 5.64% allocation. The fund is a Zacks ETF Rank #3 and added over 2.5% in the last five trading sessions (as of August 14, 2015). The fund is up 6% in the year-to-date time frame. PPA in Focus This ETF offers exposure to 53 companies that are involved in the development, manufacturing, operations as well as support of U.S. defense, homeland security and aerospace operations. It tracks the SPADE Defense Index, charging 66 bps in annual fees from investors. The fund has so far managed assets of $260.3 million while it trades at a lower average daily volume of 30,000 shares. PPC takes the sixth spot with a 5.1% share. This Zacks Rank #3 product advanced about 2.4% in the last five trading sessions (as of August 14, 2015). In the year-to-date time frame, the fund has added 4.8%.