Deutsche Bank is out with some dour news on Q1 earnings trends. They note that only 62% of the 201 S&P 500 names that have reported through Friday are beating Street estimates on profit while an embarrassing 31% are beating on revenue. DB notes that this sets up the quarter for 0% year-over-year growth. And this is before the bulk of the energy sector’s reports get underway.
One bright spot is the Health Care sector, which has been leading the market for a while and the first place the skeptics will point to as being in a bubble. I think it’s fair to say that health care stocks are expensive relative to the market and to their trailing 12 months’ earnings, but is this, by definition, proof of a bubble?
Nope.
It’s proof of one simple fact: Health care companies are crushing right now, both relatively and absolutely. They’ve delivered a total return over the last 12 months north of 30% while the S&P 500 has done closer to 15%. The justification for this outperformance comes in the form of fundamentals…
via Midway 1Q earnings season update: Barely clearing a low bar (Deutsche Bank – April 26th 2015):
Health Care is delivering the best sales growth of all the S&P. It had 15%+ EPS growth on 10%+ sales growth in 2Q14–4Q14. Operationally this strong growth continued in 1Q, as despite FX headwind, blended EPS and sales growth is now 10%. All Health Care industries are posting double digit sales growth except Pharma and Life Sciences Tools & Services. Biotech leads with 23% y/y sales growth and 44% EPS growth.
We believe strong sales/EPS growth trends at HC will continue. It is trading only 1pt higher than S&P 500 on 2015 EPS, but it is not cyclical and has significant PE upside if real long-term bond yields stay well below history as the Fed hikes.
My chart below is the XLV:SPY ratio chart, which has been trending higher since Blurred Lines was on the radio every 15 minutes and has barely missed a beat through the Uptown Funk / Shake It Off era. In the panes below, price performance (%) for the XLV Healthcare Sector SPDR followed by price performance (%) of the SPY itself.
Premium valuations get there for a reason, premium performance too.
Oh, also I think we can stop referring to the health care sector as “defensive” at this point too. They’re not exactly selling girdles and goiter pills anymore.
best kona coffee online
The best Kona Coffee took 16 centuries to arrive Online. Kona Coffee originated from the Arabica tree discovered 5th century although roast coffees best medicinal properties were not discovered until late 14th century A.D.
IPTV
[…]although sites we backlink to beneath are considerably not connected to ours, we really feel they are really worth a go by, so possess a look[…]
sex swings
[…]here are some links to internet sites that we link to since we think they’re really worth visiting[…]
how to use anal vibrator
[…]one of our visitors not long ago advised the following website[…]
how to clean sex toys
[…]usually posts some very interesting stuff like this. If you are new to this site[…]
screamin demon
[…]one of our guests not long ago advised the following website[…]
دوربین مدار بسته
Does your internet site have a make contact with webpage? I’m having a challenging time finding it but, I’d like to shoot you an e-mail. I’ve obtained some creative suggestions for your blog you may be interested in hearing. Either way, excellent weblo…
Scream Cream
[…]please pay a visit to the web-sites we follow, which includes this one, as it represents our picks through the web[…]
دوربین مدار بسته آنالوگ
Greetings from Florida! I’m bored to loss of life at operate so I made the decision to check out out your web site on my iphone for the duration of lunch split. I get pleasure from the info you offer here and can’t hold out to consider a search when I…
windows 7
[…]below you will obtain the link to some web pages that we consider you need to visit[…]
دوربین مداربسته آنالوگ
Admiring the commitment you put into your website and in depth data you offer. It’s awesome to come across a site every single as soon as in a while that is not the exact same aged rehashed info. Great study! I’ve bookmarked your internet site and I’m…
dual action stimulator
[…]Here is a good Weblog You might Locate Exciting that we Encourage You[…]
Best Pocket Pussy
[…]Here is an excellent Blog You might Discover Intriguing that we Encourage You[…]
realistic pocket pussy
[…]one of our guests not too long ago advised the following website[…]
Best Penis Pump
[…]usually posts some very intriguing stuff like this. If you are new to this site[…]