{"id":7988,"date":"2018-08-07T17:06:55","date_gmt":"2018-08-07T17:06:55","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=7988"},"modified":"2018-08-11T17:44:17","modified_gmt":"2018-08-11T17:44:17","slug":"a-quick-look-at-the-new-communication-sector-and-expected-sp-500-2019-growth-rates","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=7988","title":{"rendered":"A Quick Look at the new Communication Sector and expected SP 500 2019 Growth Rates"},"content":{"rendered":"

David Aurelio of Thomson Reuters is very helpful in getting good sector information on the Thomson Reuters IBES data on the 11 SP 500 sectors.<\/p>\n

David has never failed to deliver when asked a question.<\/p>\n

Recently this blog asked David about the coming advent of the new “Communications sector” within the SP 500 which will replace the Telecom sector as of September ’18.<\/p>\n

Here is what the revenue and EPS growth rates look like:<\/p>\n

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Click to enhance \/ enlarge<\/figcaption><\/figure>\n

 <\/p>\n

Norm Conley of JA Glynn, (@JAG_Norm, @JAG_CAPM) a money manager down in St. Louis and a friend from back in the day when we both wrote Jim Cramer’s TheStreet, published this table in late June ’18:<\/p>\n

 <\/p>\n

\"\"<\/a>
Click to enlarge \/ enhance<\/figcaption><\/figure>\n

Here is how the math will work:<\/p>\n

Technology will lose 7 sectors to the new Communications sector<\/p>\n

Consumer Discretionary will lose 12 companies to Communications<\/p>\n

Telco will lose all 3 companies to the Communications sector and cease to exist as a sector within the SP 500<\/p>\n

The Communications sector will thus have 22 companies and Telco will disappear, as it should have years ago.<\/p>\n

To greatly oversimply it, using Norm’s table, social media, traditional media and Telco will comprise the new Communication sector.<\/p>\n

Facebook and Google are the two big heavyweights moving from Tech to Communications.<\/p>\n

Part II\u00a0<\/strong><\/em><\/p>\n

Examining the top part of the Thomson Reuters IBES table, note the expected slowing of SP 500 earnings in 2019 (broken down by quarter).<\/p>\n

That is the “reversion to the mean” that readers should expect.<\/p>\n

However, just like the return on the SP 500 is trailing this year’s expected +20% SP 500 earnings growth, just because the growth rate in earnings is expected to slow in 2019, doesn’t mean that the SP 500 will have a similar return. We could see a nice year of P.E expansion next year, if the pattern holds.<\/p>\n

There are a couple more metrics that I’d like to show about the Communcation sector but it will have to wait for another post.<\/p>\n

Wanted to keep this short and sweet.<\/p>\n

Thanks for reading…<\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

David Aurelio of Thomson Reuters is very helpful in getting good sector information on the Thomson Reuters IBES data on…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[209,57,13,110,140],"tags":[],"class_list":["post-7988","post","type-post","status-publish","format-standard","hentry","category-communications-sector","category-facebook-fb","category-goog","category-googl","category-pe-expansion-contraction"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7988","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7988"}],"version-history":[{"count":7,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7988\/revisions"}],"predecessor-version":[{"id":8012,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7988\/revisions\/8012"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7988"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7988"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7988"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}