Market Snapshot: Where Do Stock Sectors Rank Based On Valuation?

Spotlight Growth - Penny Stocks, Small Cap Stocks, Micro-Cap and Micro Cap Stocks, Stock Exchange, NASDAQ, Crypto, BitCoin, DogeCoin, Ai, Artificial Intelligence, Chat GPT, OpenAi, Open Ai, ASURE Software, Trending, Now, Breaking News, BioTech, Data, Analytics, Technology, Big Tech, Banking, SVB, Bank Closures, Failures, Finance, Stock Market News, WeBull, RobinHood, Reddit Traders, Trading, Investing, Investors, Investment, Investments, Day Trading, Real Estate, VC, Venture Capital, Private Equity, Firm, Firms, OTC Markets, Public, Private, OTCQB, GOOG, APPLE, Shareholders, Stakeholders, Shares, Finance Education, Blog, Articles, Consumer Goods, Pharma, Commodities, Precious Metals, Gold, Silver, Cannabis, CBD, Lithium, Electric Vehicles, Solar, Tesla, Charging, EV, Cloud Computing, Wall Street Bets, Sports Betting, Economy, Economics, IPO, Trade Ideas, Intellectual Property Rights, Private Placement, Crowd Funding, Fundraising, Meta, Metaverse, Web 3, Cyber, Cybersecurity, Cyber Security, Aircraft, VPN, Yahoo Finance, Benzinga, BarChart.

Stock market volatility has reached elevated levels over the last several weeks, and this has led many investors to focus on key sector holdings as a protective measure. But in order to understand which sectors are actually capable of providing security for conservative portfolios, it is important to look at their relative valuations.

Here we have the best and worst performing sectors over the last year as a way of deciding the potential for renewed rallies in the weeks ahead.

Over the last year, the consumer discretionary sector has turned in a surprising performance (producing gains of 22.02% for the period). This activity has been relatively consistent throughout the year, as the SPDR Consumer Discretionary Select Sector ETF (NYSEARCA:XLY) has remained elevated in both bullish and bearish environments. At the same time, its price-to-earnings ratio (P/E) valuation remains the lowest amongst the top four performing sectors (at 16.5x TTM earnings). This suggests that those long the consumer discretionary sector have the benefit of low valuation, bullish momentum, and likely support from major declines in the event stock markets take a significant downturn.

Health care represents the second-best performing sector in the financial markets and the SPDR Health Care Select Sector ETF (NYSEARCA:XLV) is currently showing gains of 14.63% for the year. ETFs like XLV may be at risk for reversal, however, as the sector is currently trading with an elevated P/E valuation (18.2x TTM earnings). The sector’s price-to-sales ratio (P/S) remains a bit more supportive (at 1.2x TTM), which is in the lower half of the broader averages seen throughout the market.

On the bearish side of the equation, the communication services sector has been the market’s major laggard. The SPDR Communication Services Select ETF (NYSEARCA:XLC) has posted declines of 7.27% over the last year. These losses have been mitigated to some extent by the sector’s elevated dividend yield (4.83%), which is the best sector payout available in the market. The price-to-sales ratio found within the sector is roughly in-line with the market averages (1.3x TTM), but its P/E valuation is the highest in the market (at 22.6x TTM earnings). Overall, this suggests share prices could remain under pressure as we head into next year.

Additional weakness can be found within the materials sector, as the SPDR Materials Select Sector ETF (NYSEARCA:XLB), which has lost 5.20% over the last year. The potential for a bullish reversal here is strong, however, given the valuations currently seen throughout the sector. The materials sector is currently trading with a below average price-to-sales ratio (at only 1.1x TTM), and its P/E valuation looks similarly attractive (at 13.2x TTM earnings). All combined, these lower valuations increase the chance that we will see a bullish reversal in the sector as we head into next year.

Disclaimer: The author and Spotlight Growth has no positions in any of the stocks mentioned in this article. Nor does either party currently have any relationship, or any other conflicts of interest, with any of the companies mentioned in this article. This content is meant for informational and entertainment purposes only and should not be meant as a recommendation to buy or sell any securities. Please visit a licensed financial representative to determine what investments are right for you.

Article By: Ric Cox

Market Snapshot: Where Do Stock Sectors Rank Based On Valuation?

Asure Software (NASDAQ: ASUR) is Expanding to Meet the Rising Demand for Human Capital Management Software

OLB Group (NASDAQ: OLB) and Cuentas (NASDAQ: CUEN) Team Up to Bring Fintech Solutions to Over 32,000 Bodegas Across the United States

New Purchase Orders for SD7 Rugged Device, VK7, and Other Accessories Boost Siyata Mobile’s Outlook (NASDAQ: SYTA)

Telcoin (TEL) Quietly Leads a Crypto Remittance Revolution

Vision Marine (NASDAQ: VMAR): An Innovative, Revenue-Producing Company Riding the Electric Boating Growth Trend

Decentraland (MANA) is the Proof of Concept for the Emerging Metaverse

Alfi, Inc. (NASDAQ: ALF) Climbs 51% After Entering Into Agreement with Miami-Based Fulfillment & Distribution Center For its Ridesharing Digital Tablet Rollout

Telcoin (TEL) Continues to Demonstrate Fundamental Progress, Displaying Bullish Technical Setup

Grove Collaborative (NYSE: GROV) Expands Retail Distribution Footprint Into 2,200 Additional Stores

The Metaverse is Exploding in Popularity and Growth

Cybersecurity Stocks Coming Into Focus Amid High-Profile Attacks

Safe-T (NASDAQ: SFET) Has Been Selected to Present at the United Nations’ Office of Information and Communications Technology Event

Safe-T Group (NASDAQ: SFET) Reports Fourth Quarter and Full Year 2020 Financial Results

Safe-T Group Ltd. (NASDAQ: SFET) Estimates Record-High Annual Revenues of Approximately $4.9 Million Representing ~50% Growth YoY 2020

Safe-T Group Ltd. (NASDAQ: SFET) to Participate at A.G.P.’s Virtual Emerging Growth Technology Conference on February 4, 2021

Nvidia Announces New Chip Specifically For Ethereum Mining

Sortis Holdings, Inc. (OTC Pink: SOHI) Announces Results for Second Quarter 2020

Medical Marijuana Coming Soon to Virginia

SushiSwap (SUSHI) Appropriates Uniswap’s Liquidity Pool by Preempting Native Token Release

Europe Shows Signs of Warming to SPACs

Understanding EBITDA and Adjusted EBITDA: A View Into Asure’s (NASDAQ: ASUR) Recent Financial Performance

From Microsoft to Travel Tech: VCI Global’s (NASDAQ: VCIG) Expanding AI Horizons

Singapore’s Leap into the Future of Cell and Gene Therapies

Asure (NASDAQ: ASUR) Completes Capital Raise to Fuel High-Interest Debt Reduction, Craig-Hallum Analyst Praises Move and Estimates Bullish Outcome

Asure (NASDAQ: ASUR) Reports Massive 50% Y/Y Revenue Growth During Q2 2023, Raises $40 Million to Pay Off High-Interest Debt and Fund Acquisitions

Hanryu Holdings (NASDAQ: HRYU) Introduces AI-powered Assistant, Deok Gom, to Boost Engagement on FANTOO Platform

Tilray (NASDAQ: TLRY) Acquires Major Beer Brands, Poised to Become 5th Largest Craft Beer Brewer in the United States

Asure Software’s (NASDAQ: ASUR) Q2 2023 Financial Results Indicate Robust Growth in HCM Market, Solidifies Strategic Partnership with Vestwell

Campbell Soup Company (NYSE: CPB) Acquires Pasta Sauce Parent Company, Sovos Brands (NASDAQ: SOVO), in a Deal Valued at $2.7 Billion

ParaZero Technologies (NASDAQ: PRZO) Secures Repeat Order for Bespoke Drone Safety System from a Fortune 500 Automotive Manufacturer

Recent News

Understanding EBITDA and Adjusted EBITDA: A View Into Asure’s (NASDAQ: ASUR) Recent Financial Performance

From Microsoft to Travel Tech: VCI Global’s (NASDAQ: VCIG) Expanding AI Horizons

Categories

Site Navigation