Four Winning Sectors |
Written by Rob Goldman |
Today, we salute all of the veterans that have given their service to our great country. Interestingly, each Veteran's Day celebration tends to coincide with seasonality and events that are key drivers for specific stocks and sectors, aided in part by a series of company institutional roadshows starting next week. See which winning sectors as part of this phenomenon that usually enjoy very strong fourth quarter performances. FOUR WINNING SECTORSToday, we salute all war veterans. It is a shame that in 2014 we are viewed as weak and ineffective at best, while our leadership puts the fear in no one and the group gets treated like punks in public by the likes of Vladimir Putin and others. On the other hand, as we alluded to last week, a change in the composition and leadership in Congress will likely give a budget boost to defense and security, which in turn could boost defense stocks. The fact that another Cold War could be brewing, combined with our current activities abroad will likely put attention on the space. It is not uncommon for investors to make decisions based on events and seasonality during this time of year. For example, as we alluded to last week, energy stocks, and oil in particular, is poised to get a rise out of the "November Polar Vortex" that is hitting across North America. Sure, oil could see another 10% decline, but for the most part, all of the bad news and pricing is likely reflected in oil prices. As Q3 earnings come to a close, tech stocks have shown resiliency and typically generate their best performance at the end of the year. Starting next week, with financial reporting and quiet periods behind them, management teams of tech companies (and for that matter all stocks) will be engaged in year-end roadshows with institutional investors. These roadshows lead to proper due diligence and buying into these companies as active managers set their portfolios for the year, while analysts issue final estimates for the coming year. We should note that this is one of the few tangible periods when active manager moves are leading indicators and passive managers follow behind. Of course the most notable seasonal sector is the consumer discretionary segment. The commercials for the holiday season are nearly in full swing (and I am already sick of the Korbel commercials) and there are a few periods in which investors can see big rises in select stocks. These include the official online buying day, the Black Friday period, and the week after the Christmas holiday. We are not expecting a banner year in this sector but it is rare that it does not give investors a boost. So, how does one take advantage of these opportunities? ETFs remain the best approach. Below are some examples and options, along with year-to-date performances. Going forward, we will be highlighting individual stocks in the four horseman sectors: defense, energy, technology, consumer discretionary. Overall U.S. Sector Performance 2014 YTD ![]() Have a great week! Launched in May 2010, The Goldman Guide is a free weekly publication of Goldman Small Cap Research and is written by Founder Rob Goldman with contributions from the GSCR contributor team. This non-sponsored investment newsletter seeks to provide investors with market, economic, political and equity-specific insights via an action-oriented, straight to the point approach. No companies mentioned in this newsletter are current sponsored research clients of the Company or its parent, unless noted, With rare exceptions, all companies or investment ideas mentioned in this publication are publicly traded stocks listed either on the NYSE or the NASDAQ. Goldman Small Cap Research members and contributors' bios, certifications, and experience can be found on our website: www.goldmanresearch.com . Disclaimer This newsletter was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces non-sponsored and sponsored (paid) investment research. Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co. The Firm's non-sponsored research publications category, Select Research, reflects the Firm's internally generated stock ideas, along with economic, industry and market outlooks. In virtually all cases, stocks mentioned in Select Research offerings are listed on the NYSE or the NASDAQ. Publications in this category include the weekly newsletter The Goldman Guide, daily Market Monitor blogs, Special Reports, and premium products such as The 30-30 Report. Goldman Small Cap Research analysts are neither long nor short stocks mentioned in this newsletter. Opportunity Research reports, updates and Microcap Hot Topics articles reflect sponsored (paid) research but can also include non-sponsored micro cap research ideas that typically carry greater risks than those stocks covered in Select Research category. It is important to note that while we may track performance separately, we utilize many of the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company's individual disclosures for each engagement, which can be found in company-specific Opportunity Research reports, updates and articles. Goldman Small Cap Research has not been compensated for any content in this issue. All information contained in this newsletter and in our reports were provided by the companies mentioned via news releases, filings, and their websites or generated from our own due diligence. Economic, market data and charts are provided by a variety of sources and are cited upon publication. Stock performance data is derived from Yahoo! Finance. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, other firms, or other financial news outlets. Goldman Small Cap Research relied solely upon information provided by companies through filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research report, update, article, blog, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed. This newsletter does not take into account the investment objectives, financial situation, or particular needs of any particular person. This newsletter does not provide all information material to an investor's decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with the FINRA or with any state securities regulatory authority. ALL INFORMATION IN THIS REPORT OR NEWSLETTER IS PROVIDED "AS IS" WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION. For more information, visit our Disclaimer: www.goldmanresearch.com. |