Here is a table I build occasionally using Bespoke, Schwab, and Thomson Reuters data. BespokeSP500 sector data It would have been more meaningful published Sunday, April 26th since the return data was as of Friday afternoon, April 24th, but it will still give readers some idea of how the sectors stand on earnings growth and P.E basis.
My favorite sector coming into the year was Financials, although the largest overweight for clients is Technology. Financials have been one of the worst performing sectors year-to-date, even though Q1 ’15 earnings were pretty solid. The Bank of America weighting is distorting the earnings growth estimates of entire Financial sector. Per Factset, removing Bank of America from the Financial sector results in Financial sector growth falling to 5.5% from 12.5%.
Healthcare has the best Q1 ’15 growth rate (again) within the SP 500 led by Bioetch. Per Thomson, removing biotech from the Healthcare sector drops the 10% sector growth rate to 3.2%. Per Factset, removing Gilead and Activis, drops the Facset Healthcare growth rate from 14.8% to 8.7%.
A few weeks, right at the end of March ’15, I noted that the Industrial sector had seen positive earnings growth revisions from January 1 ’15 – March 31, ’15, which when I talked to Greg Harrison of Thomson Reuters was entirely due to the addition of American Airlines to the index. GE’s writedown looks to have crushed the sector with GE’s expecetd 2015 EPS falling from $1.72 as of 3/31 to $1.29 following the real estate write-down and disposal as of 4/27/15.
Here is the Industrial sector’s spreadsheet, as of late March ’15. (Note GE’s shares and net income importance to the sector): FC – IndustrialsMar15
Revenue growth is the biggest disappointment so far this quarter. Per Factset, the percentage of 47% of the SP 500 beating estimates is below the 5-year average.
Energy is still a huge drag: per Factset, revenue growth within the SP 500 would be +2.6% versus the -3.5% actual.
By the end of this week, roughly 350 of the SP 500 will have reported Q1 ’15 financial results.