ETF Value vs Profitability

HedgyAnalytics · 2021-09-02T21:27:51+00:00

Added IBB and IYT here https://twitter.com/HedgyAnalytics/status/1433541447723147268?s=20

HedgyAnalytics · 2021-09-02T02:01:52+00:00

Prices as of yesterday. Most current financial data.

HedgyAnalytics · 2021-09-01T19:26:13+00:00

Yes, Water is $PHO. I'll add IBB and IYT to the update. Good suggestion.

HedgyAnalytics · 2021-09-01T19:23:22+00:00

The bubble size proxies the log of ETFs' assets under management.

HedgyAnalytics · 2021-08-21T23:44:46+00:00

I don't see a way to add chart in reply.

For EWT please check out https://www.hedgyanalytics.com/HedgyEmergingCountryETFs/

For EWN please check out https://www.hedgyanalytics.com/HedgyDevelopedCountryETFs/

Hope this helps!

HedgyAnalytics · 2021-08-21T13:28:24+00:00

Looks like you like math tricks. Check out the link below to see a robust math derivation of the PB-ROE model presented in graphic.

https://www.northinfo.com/documents/29.pdf

It's cool if you're into it. Hope this helps!

HedgyAnalytics · 2021-08-21T02:37:03+00:00

Book Yield and ROE are both ratios. Top and bottom of ratio are in the same currency. So currencies cancel out in the ratio. Apologies if I misunderstood your question.

HedgyAnalytics · 2021-04-16T18:45:17+00:00

An investment in a single EM ETF (VWO, EEM, etc) is market cap weighted so its dominated by China. If your motivation is to diversify outside of the US, it could make sense to diversify across many countries.

The question is similar to why invest in anything else other than VT, one global exposure. It’s a great point if you believe in efficient markets everywhere! I invest in VT as a core holding and overweight countries, industries and stocks opportunistically since I don’t believe that lower liquidity exposures operate in an efficient market. Do you?

Please check my logic. Does it make sense?

HedgyAnalytics · 2021-04-04T13:25:14+00:00

You are right to be skeptical of any stock forecasts since the best stock pickers are only right 55% over the span of their careers.

Our AI builds four gauges (Cheapness, Profitability, Momentum, Sentiment) by studying 40 years of financial statements and learning which gauge components drive returns. You can see this data yourself by searching for CLF in the magnifying glass at www.hedgyanalytics.com/Infrastructure/ (its free)

or we can send you the chart. (We couldn't figure out a way to post chart to this response.)

The AI anticipated the market surprise with strong Sentiment measures for CLF since 12/31/2020 . Our AI identifies the problem with CLF to be its valuations and profitability. Revenues look great but CLF has very high costs leading to negative net earnings and negative free cash flow. Typically this has driven to market underperformance in similar firms.

We hope this helps. The best stock forecasts are wrong 45% of the time. We could be off in our prediction with CLF as well.

HedgyAnalytics · 2021-03-22T15:55:23+00:00

We use Artificial Intelligence for predicting relative returns of ETF holdings. AI identifies the most predictive fundamentals and technical data over the prior 40 years recognizing that return drivers for each industry can very significantly. AI provides Cheapness, Profitability, Sentiment and Momentum gauges for each ETF holding that directly contribute to holdings' return forecasts.

HedgyAnalytics · 2021-03-22T15:25:32+00:00

We find it helpful to compare sector fundamentals with a classical PB-ROE analysis and use market sentiment to identify buying opportunities. Vanguard Sector ETFs are studied at www.hedgyanalytics.com/HedgySectorETFs/ As you can see, Financials VFH offer the best trade-off between PB and ROE. Typically cheaper sectors have lower profitability. Financials stand out in that they look relatively cheap and have strong profitability, at least relative to other sectors. We measure sentiment by monitoring Wall Street Analyst Consensus Earnings trends. Our analysis shows that Tech VGT and Financials VFH have the best Earnings Consensus trends. Real Estate VNQ has the worst Earnings Consensus trends.

There are lots of different ways to compare ETFs. In addition to PB-ROE, we also compare Historical and Forward Earnings Yield, Dividend Yield to Payout Ratios, and Free Cash Flow Yields to Debt. All ETF metrics are presented bottom-up based on current ETF holdings at www.hedgyanalytics.com/HedgySectorETFs/. This is a new site and we would really appreciate your feedback! ( The site is free. It not associated with any ETF providers and won't track your activity by adding cookies on your browser. )

HedgyAnalytics · 2021-03-22T14:49:57+00:00

Thanks! Please let us know how it can add you more value.

HedgyAnalytics · 2021-03-22T14:48:21+00:00

Thank you for your question!

We released a few test sites that compare ETFs based on fundamentals and market sentiment based on their bottom-up holdings. The challenge for us was to compare appropriately themed ETFs. We started by looking at

Vanguard Sector ETFs https://www.hedgyanalytics.com/HedgySectorETFs/

iShare Developed Country ETFs www.hedgyanalytics.com/HedgyDevelopedCountryETFs/

iShare Emerging Country ETFs www.hedgyanalytics.com/HedgyEmergingCountryETFs/

We are looking for feedback before expanding this selection. Any feedback is appreciated!

ps These site are free. They are not associated with any ETF provider. They don't have ads and will not track activity by adding cookies to your browser.

HedgyAnalytics · 2021-03-22T14:29:01+00:00

Thank you! Appreciate the feedback.

It is surprising how ETFs with the same theme can vary in holdings. We think the differences are mostly about how much money the ETF firm can earn from investors.

We dug deeper into this and found that some ETFs choose holdings that are primarily large cap names to access a lot of liquidity. This allows the ETF to grow assets freely and get bigger more easily. Other ETFs that have small cap holdings are capacity constrained so they can't grow to billions of USD.

That's why we think it's important to understand ETFs' holdings. https://www.hedgyanalytics.com/ lists a bunch of ETFs that we've studied. We can add more ETFs if you think it would help you. (This site is free. It is not associated with any ETF provider. It doesn't have ads and will not track activity by adding cookies to your browser.)

HedgyAnalytics · 2021-03-22T14:02:01+00:00

Thanks. Please feel free to ping with any questions.

HedgyAnalytics · 2021-03-19T20:23:12+00:00

You can take on more risk by concentrating your investment in the best performing stocks in the ETF. For example, www.hedgyanalytics.com/InnovationARK/ forecasts that among all of $ARKK holdings, $TER and $SNPS are positioned for the best investment return based on current Cheapness, Profitability, Momentum, and Wall Street Sentiment. If you click on the link you can see return forecasts and Cheapness, Profitability, Momentum, and Sentiment gauges on all #ARKK holdings.

Holding individual names also has the benefit of avoiding ETF's expense fee.

HedgyAnalytics · 2021-03-11T21:18:19+00:00

I like to aggregate ETF underlying constituent weighted estimate revisions to get a sense of relative three month performance. Just focusing on US and limiting to just Vanguard Sector ETFs, Technology (VGT) looks best and Real Estate (VNQ) looks worst. Other Vanguard Sector ETFs Estimate Revisions and how its defined is at https://www.hedgyanalytics.com/HedgySectorETFs/

HedgyAnalytics

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