Here is the trend in the SP 500’s expected, full-year, 2015 sector earnings growth over three time-frames:
Column 1 is as of Friday, January 16th, 2015
Column 2 is as of January 1, 2015
Column 3 is as of October 1, 2014:
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Consumer Disc: +16,6%, +16.9%, +18%
Consumer Spls: +6%, +6.6%, +9%
Energy: -34.9%, -23.3%, +6.9%
Financials: +17.8%, 17.8%, +16.7%
Health Care: +10.3%, +10.5%, +11.6%
Industrials: +9.5%, +9.7% +11.5%
Materials: +12.7%, +14.7%, +19.1%
Technology: +10.9%, +11.3%, +12.5%
Telco: +5.3%, +4.9%, +6.5%
Utilities: +2.3%, +2.5%, +2.8%
SP 500: +6.6%, +8.1%, +12.4%
Conclusion / Summary: Financials remain my top sector pick for 2015, as even though all of the Big 3 banks saw their stocks hit this week on earnings reports, the expected growth for the sector for full-year 2015 ha snot only remain unchanged since Jan 1, but expected sector earnings growth for 2015 has risen slightly, the only sector of the 10 to do since October 1, 2014. Our top holdings remain JPM, BAC, SCHW, CME within the financial sector. Berkshire Hathaway remains the top weighting in the XLF, the SPDR Financial ETF. We have never been big insurance company investors, but the XLF will give you Berkshire exposure, if you want it.
Financials are a pretty diverse group, as you can see from this spreadsheet (detail courtesy of Thomson), which shows the earnings distribution within the sector: FC – Financials.
Compared to Energy which we looked at yesterday here, the Financials top 5 weights sum to just 6.6%.
We’ll flush this out further as q1 ’15 moves along.
Trinity Asset Management, Inc. by:
Brian Gilmartin, CFA
Portfolio manager