Below is a chart and brief excerpt from today's Early Look written by Hedgeye CEO Keith McCullough.
Little known facts on Utilities (XLU) vs. “stocks” (especially those Small Cap dogs in the Russell 2000, which is -4% from its Q318 cycle peak):A) Pre-dividends, Utilities (XLU) are +34% since our process made the Full Investing Cycle pivot in Q3 of 2018
B) Q419 Earning Season to-date, Utilities have an aggregate year-over- year EPS #acceleration of +15.1%
Those returns and bottom-up Earnings Accelerations compare with a Sector Style of “stocks” that my process hasn’t had us long of:A) Pre-dividends (lower than Utes), Industrials (XLI) are +5.4% since we made the Full Investing Cycle pivot in Q3 of 2018
B) Q419 Earnings Season to-date, Industrials have an aggregate year-over-year EPS #deceleration of -5.6%
We all know what people in our profession are talking about when they say “buy stocks” because we know that they have no idea what the innovation of a new Full Cycle Investing #process entails.