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Materials

May 07 2019

Commodity Stocks: More Of The Same

  • May 7, 2019

Someone forgot to tell commodity trades this is an era of diversity of inclusivity: This year’s leap in the S&P/Goldman Sachs Commodity Index has been entirely the result of its heavily-weighted energy inputs.

Oct 05 2018

Time To Get Contrary With Commodities?

  • Oct 5, 2018

After a strong 2016 and a “Bridesmaid” (i.e., sector runner-up) performance in 2017, the Materials sector seemed primed to benefit from the “late cycle” character of the economy in 2018.

Feb 23 2018

The Commodity Stock Disconnect

  • Feb 23, 2018

While watching a forecast go awry is painful, there’s an alternative that we consider to be even worse: the failure to be paid on an accurate forecast. The resulting feeling of helplessness must be similar to that of a corporate director who manages to lose money on inside information.

Aug 05 2016

Commodities: More To Come?

  • Aug 5, 2016

Commodities have enjoyed a strong year thus far, and the GS Scores on the Materials sector have followed suit (albeit with a slight lag), as highlighted in June’s “Of Special Interest” section.

Jun 07 2016

Time For Materials?

  • Jun 7, 2016

The Leuthold Materials sector jumped five spots to #3 in the June Group Selection (GS) rankings, its highest ranking in eight years and the first reading outside of the bottom four in almost four years.

Feb 06 2015

Capex, Capacity And The Dollar

  • Feb 6, 2015

We’ve been highlighting the overinvestment (or malinvestment) risks in commodity-oriented equity sectors for the past three years, but we certainly did not foresee those risks exploding the way they have in the oil market over the last seven months.

Jun 06 2014

Commodities: Not A New Bull

  • Jun 6, 2014

The year’s second biggest surprise (next to the relentless drop in bond yields) might be the YTD bounce in the major commodity indexes.

Apr 08 2014

Select Industries Purchases Commodity Chemicals

  • Apr 8, 2014

Well-rounded factor strength, coupled with an intriguing fundamental backdrop, lead us to our first Materials group holding in a year.

Apr 07 2014

Profit Margins At The Sector Level

  • Apr 7, 2014

All ten of the S&P 500 sectors recorded a sequential increase in four-quarter trailing net profit margins. But consider where sector margins stand today relative to their 25-year medians. Eight of ten S&P 500 sectors are recording profit margins well above their long-term medians.

Mar 07 2014

Another Kind Of Decoupling?

  • Mar 7, 2014

We’ve discussed the interrelationships between industrial commodities, commodity-oriented equities and Emerging Market stocks. Getting one’s bet right on any of these three has generally led to profitable positions in all three. But that certainly hasn’t been true in recent months.

Jan 08 2014

Sector Performance – Finding Discrepancies

  • Jan 8, 2014

Our Tech sector outpaced the S&P 500 Tech sector by  1400 bps and our Materials sector lagged the S&P 500 Materials by 2300 bps. Here’s why…

Jan 08 2014

Commodities In 2014: Supply Remains A Concern

  • Jan 8, 2014

While gold garnered most of the headlines last year (down 27%), commodities performed badly across the board in 2013. We expect more of the same in 2014.

Jan 08 2014

Stock Market Leadership In 2014: Large Caps, Tech, Health Care

  • Jan 8, 2014

Following a great year for trend-following, capitalizing on key reversals in sector performance will be important in winning the 2014 performance derby.

Dec 06 2013

2013 Factor Performance: What Worked? What Will Keep Working?

  • Dec 6, 2013

Momentum and Value worked in 2013. Materials and Financials were the easiest sectors to exploit; Discretionary and Tech the most difficult. Momentum works in December; Value and Small Caps at the start of the year.

Oct 08 2013

Group Models: Info Tech Tops Domestic, Financials Remain Atop Global

  • Oct 8, 2013

Both models have numerous Information Technology and Financials groups in Attractive territory. Neither model has any Unattractive Tech groups. Alternatively, neither model has any Attractive Utilities groups, while several Utilities rate Unattractive in each.

Sep 10 2013

Group Models: Info Tech Tops Domestic, Financials Tops Global

  • Sep 10, 2013

Both models (particularly domestic) have a number of Attractive rated Information Technology groups and no Unattractive rated Tech groups. Financials’ domination of the Global Attractive range continues.

Sep 10 2013

Sector Margins: Just Thank The Consumer

  • Sep 10, 2013

We’ve noted before that profit margin gains since the technology boom have been primarily a Large Cap phenomenon.

Aug 07 2013

A Comprehensive Look At The Emerging Markets: Diagnosis And Prognosis

  • Aug 7, 2013

We examine Emerging Markets from both the top-down and bottom-up perspectives as we try to identify where to move and what to expect. We check in on two successful EM thematic group ideas as well.

Aug 07 2013

A New Leg In The Commodity Decline?

  • Aug 7, 2013

For more than two years we’ve discussed the supply-side risks to commodity producers stemming from capacity built during the manic “Third Act” of last decade’s Three Act Play in commodities. Commodity-oriented equities have indeed underperformed since 2011, but to date, most pundits have laid blame squarely on the demand side.

Aug 07 2013

Key Observations On Q2 S&P 1500 Earnings

  • Aug 7, 2013

Year-over-year EPS growth rate for companies with Q2 reports (with about 65% in) currently stands at +4.2%, while revenue growth has come in at a better than expected +2.6%.

Aug 06 2013

Group Models Agree On Energy & Materials

  • Aug 6, 2013

But Information Technology rises to the top of the Domestic model, while the trend of Financials domination in the Global model remains intact.

Aug 06 2013

Sector Performance and Beta Comparisons

  • Aug 6, 2013

There are some substantial deviations in sector performance depending on your constituents and weighting scheme while, simultaneously, betas are converging toward one another.

Jul 12 2013

Domestic and Global Group Models: Strong Agreement On Financials

  • Jul 12, 2013

Our Domestic Scores have five Financials groups rating Attractive; these same five industry groups are Attractive in our Global model. In total, seven Financials groups rank Attractive in the Global model, with insurance groups looking particularly Attractive.

Jul 09 2013

A Contrarian Call For The Second Half

  • Jul 9, 2013

With the notable exception of the Consumer Discretionary sector, cyclical stocks topped out globally on a relative basis in early 2011 (Chart 3). Throughout the last two and one half years, there have been repeated calls for industrial cyclicals—which were, of course, the leaders of the last cyclical bull market—to reassume stock market leadership.

Jun 07 2013

Commodities: Still Worried About Supply

  • Jun 7, 2013

Commodity producers seem to believe that last decade’s commodity boom is set to repeat. This belief itself probably ensures that it won’t.

Dec 06 2012

The Outlook For Commodity Stocks

  • Dec 6, 2012

Energy looks cheaper and appears much more washed out from a sentiment perspective. Contrarians looking for commodity exposure should favor this sector over Materials. 

May 04 2011

Adding Aluminum: Initiating Exposure To Materials Sector

  • May 4, 2011

Select Industries portfolio has added new equity group holdings in Aluminum, initiating sector exposure in Materials.

Aug 03 2010

A Dissenting View On Materials

  • Aug 3, 2010

Per our work, sectors like Consumer Discretionary and Technology provide a better way to capitalize on the global recovery now underway.

 

Sep 03 2008

Materials: From First To Worst

  • Sep 3, 2008

Materials sector has fallen fast and hard in our GS Score rankings and is now the worst rated. Still see further downside based on valuations and technical factors. No, we do not think the underlying commodities can outperform while the stocks fall.

 

Aug 05 2008

Commodity Curtain Call?

  • Aug 5, 2008

Inflation is peaking and the GS Scores did a great job signaling an exit from the Industrial Metals play. Commodities were hit hard in July.

 

Aug 05 2006

Commodity Inflation = OWN MATERIALS STOCKS; Commodity DEflation = OWN MATERIALS STOCKS!!

  • Aug 5, 2006

There remains considerable macro support for industrial commodities. 

Jun 05 2006

More Life Left In Materials?

  • Jun 5, 2006

The Materials sector moved up to the top position in the latest Sector Power Rankings, based on the number of Attractive and Unattractive groups in each sector.

Jul 04 2005

Advance/Decline Line & Price Line Divergences Offer Guidance

  • Jul 4, 2005

Using Breadth Dynamics to assess strength of small cap stocks versus large cap stocks within various broad market sectors: Health Care, Materials, Consumer Discretionary, and Energy.