{"id":3096,"date":"2023-03-09T18:50:08","date_gmt":"2023-03-09T18:50:08","guid":{"rendered":"http:\/\/blog.valuengine.com\/?p=3096"},"modified":"2023-03-09T18:51:44","modified_gmt":"2023-03-09T18:51:44","slug":"deja-vu-will-tech-stocks-and-etfs-crash-again","status":"publish","type":"post","link":"http:\/\/blog.valuengine.com\/index.php\/deja-vu-will-tech-stocks-and-etfs-crash-again\/","title":{"rendered":"D\u00e9j\u00e0 vu – Will Tech Stocks and ETFs Crash Again?"},"content":{"rendered":"

Watching tech stocks lead the market resurgence in the first six weeks of Q1 2023, I was hit with a flash of d\u00e9j\u00e0 vu. Just six months ago, the market slaughter of the first six months of 2022 was led by a strong upsurge in the first six weeks of 2022 by beaten-up growth stocks.\u00a0 It didn\u2019t last. Those same stocks led the market back down to new lows between August 16 and September 30. Conversely, when stocks finally surged during parts of the fourth quarter, it was value and high-income stocks that led the comeback as tech stocks continued to flounder.<\/p>\n

All 5,000 stocks, 16 sector groups, 140 industries, and 500 ETFs have been updated.<\/b><\/h5>\n
Two week free trial:<\/b> www.ValuEngine.com<\/b><\/a>\u00a0<\/b><\/h5>\n

The first six weeks of 2023 looked about the same while weeks 7 and 8 have eaten those gains. Some \u201cinnovative\u201d and \u201cnext generation\u201d ETFs still have impressive returns nearly two months into the quarter.\u00a0 Most had performed very poorly during the prior 10 months.<\/p>\n

To illustrate the point, let\u2019s take a look at 15 of the top performing non-leveraged US stock ETFs this year to-date in comparison to their 12-month returns.<\/p>\n

Current ValuEngine reports on these stocks or ETFS can be viewed<\/b> HERE<\/b><\/a><\/h5>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Ticker<\/td>\nETF Name<\/td>\nYTD Return<\/td>\n12-Month Return<\/td>\nVE Rating<\/td>\n<\/tr>\n
BITQ<\/b><\/td>\nBitwise Crypto Innovators<\/td>\n61.29%<\/b><\/td>\n-62.43%<\/td>\nN\/A<\/td>\n<\/tr>\n
BKCH<\/b><\/td>\nGlobal X Blockchain<\/td>\n59.72%<\/td>\n-65.99%<\/td>\nN\/A<\/td>\n<\/tr>\n
ARKW<\/b><\/td>\nARK Next Gen Internet<\/td>\n31.57%<\/td>\n-34.98%<\/td>\n1<\/b><\/td>\n<\/tr>\n
ARKK<\/b><\/td>\nARK Innovation<\/td>\n26.96%<\/td>\n-34.91%<\/td>\n1<\/b><\/td>\n<\/tr>\n
MEME<\/b><\/td>\nRoundHill Meme Stock<\/td>\n25.38%<\/td>\n-41.92%<\/td>\nN\/A<\/td>\n<\/tr>\n
ARKQ<\/b><\/td>\nARK Autonomous & Robotics<\/td>\n20.08%<\/td>\n-18.00%<\/td>\n1<\/b><\/td>\n<\/tr>\n
SOXX<\/b><\/td>\niShares Semiconductor<\/td>\n18.88%<\/td>\n-7.55%<\/td>\n1<\/b><\/td>\n<\/tr>\n
XWEB<\/b><\/td>\nSPDR S&P Internet<\/td>\n17.99%<\/td>\n-34.19%<\/td>\n5<\/b><\/td>\n<\/tr>\n
PSCD<\/b><\/td>\nInvesco S&P Small Cap Discretionary<\/td>\n17.23%<\/td>\n-0.76%<\/td>\n1<\/b><\/td>\n<\/tr>\n
PNQI<\/b><\/td>\nInvesco NASDAQ Internet<\/td>\n15.99%<\/td>\n-18.87%<\/td>\n4<\/b><\/td>\n<\/tr>\n
XITK<\/b><\/td>\nSPDR FactSet Innovative Technology<\/td>\n15.83%<\/td>\n-23.44%<\/td>\n2<\/b><\/td>\n<\/tr>\n
XSD<\/b><\/td>\nSPDR S&P Semiconductor<\/td>\n15.48%<\/td>\n-1.77%<\/td>\n1<\/b><\/td>\n<\/tr>\n
QTEC<\/b><\/td>\nFirst Trust NASDAQ-100 Technology Sector Index<\/td>\n13.63%<\/td>\n-17.66%<\/td>\n1<\/b><\/td>\n<\/tr>\n
XTN<\/b><\/td>\nSPDR S&P Transportation<\/td>\n13.29%<\/td>\n-10.42%<\/td>\n1<\/b><\/td>\n<\/tr>\n
SPHB<\/b><\/td>\nInvesco S&P 500 High Beta<\/td>\n12.77%<\/td>\n+1.10%<\/b><\/td>\n1<\/b><\/td>\n<\/tr>\n
QQQM<\/b><\/td>\nInvesco Nasdaq 100<\/td>\n11.46%<\/td>\n-9.20%<\/td>\n1<\/b><\/td>\n<\/tr>\n
IVV<\/b><\/td>\niShares Core S&P 500<\/td>\n4.76%<\/td>\n-3.46%<\/td>\n3<\/b><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
Current ValuEngine reports on these stocks or ETFS can be viewed<\/b> HERE<\/b><\/a><\/h5>\n

Analysis<\/b><\/p>\n

    \n
  1. The top two ETFs in the table above, BITQ, <\/b>Bitwise Crypto Innovators ETF and BKCH<\/b>, Global X Blockchain ETF have both gained a spectacular 50+% in 2023 thus far. Yet, even counting those impressive two months, they have the worst 12-month returns by far.\u00a0 They\u2019ve both lost almost 2\/3 of their value from the end of February 2022.<\/li>\n
  2. ARK Investment Management, one of the best known active-ETF-only firms, has three of the next four top performing ETFS. ARKW <\/b>ARK Next Gen Internet ETF, ARKK, <\/b>its flagship ARK Innovation ETF and in sixth place, ARK <\/b>Autonomous & Robotics ETF.\u00a0 From a return-comparison perspective, the stories are similar proportionately although lesser in magnitude. 2-month returns from 20% to 32% reducing the losses of the past 12-months to \u201conly\u201d -18% to -35%.\u00a0 Index ETFs in the Sector were not exempt to the same kind of treatment. QTEC, <\/b>the First Trust Nasdaq-100 Tech Sector Index ETF shows a similar pattern although lesser in magnitude. The ValuEngine predictive model seems unimpressed by the recent turnarounds.\u00a0 All six of the ETFs discussed thus far get our lowest rating 1 (<\/b>Strong Sell) for year-ahead performance.\u00a0 Although four slots further down in this table, all of the above also holds for XITK, <\/b>SPDR FactSet Innovative Technology. It has lower returns in both categories and the same dismal prognosis of a 1 <\/b>rating.\u00a0 <\/b>All of these have outperformed QQQM <\/b>representing the Nasdaq-100, a popular benchmark for the tech sector, in the past two months. But under performed it badly for the past 12 months.<\/li>\n
  3. The two semiconductor ETFs, SOXX <\/b>and XSD, <\/b>also are rated 1 <\/b>(Strong Sell) despite being among the year-to-date price return leaders. While they also posted negative returns last year, they were of much lower magnitude. SOXX, <\/b>one if the iShares by Blackrock, has a better 1-year return than the Nasdaq-100 while XSD <\/b>has a better 1-year return than the S&P 500 and is just barely negative at -1.9%<\/li>\n
  4. Two sectors with very little in common with technology also made it to this table.\u00a0 They are PSCD, <\/b>Invesco S&P Small Cap Discretionary ETF, and XTN, <\/b>SPDR S&P Transportation ETF.\u00a0 Neither are liked by ValuEngine\u2019s predictive models as both are rated 1 <\/b>(Strong Sell). PSCD <\/b>stands out as having weathered the storm better than most ETFs, losing just 0.7%. This is considerably better than benchmark ETFs QQQM<\/b> and IVV<\/b>.<\/li>\n
  5. That leaves us with just one more ETF rated as a Sell or Strong Sell in this table. I must admit I not only found the numbers counterintuitive but almost shocking.\u00a0 SPHB, <\/b>the Invesco S&P High Beta ETF, is designed to provide a return similar to 50% higher than the S&P 500 when the market is up and 50% lower (worse) when the market is down.\u00a0 In selecting constituents for the underlying index, trailing daily price changes over the past 12 months are used to calculate the S&P 500 constituents\u2019 betas. Such constituents are then ranked in descending order of their betas wherein the top 100 securities finally form the index. Its weighting methodology is also designed so each constituent is set proportional to its beta \u2014 all these in an attempt to magnify market movements<\/b>. Since the S&P 500 return was -3.5% for the 1-year period, a target expectation for SPHB<\/b>\u2019s return during the period would be to multiply -3.5% by 1.5 for an expected value of -5.25%.\u00a0 Instead, it was the top performer in the table for the 12-month period and the only one with a positive return, +1.1%.\u00a0 Nevertheless, its VE Rating is 1 <\/b>(Strong Sell).<\/li>\n
  6. Perhaps just as unexpected is the fact that the two ETFs in the table with Buy Recommendations are both Internet ETFs.\u00a0 The top-rated ETF is XWEB<\/b>, SPDR S&P Internet ETF which tracks an equal-weighted index of US internet retail, software, and services companies. XWEB currently is rated 5<\/b> (Strong Buy). Among its top 10 holdings are two stocks with 4 <\/b>(Buy) recommendations: BIGC<\/b>. BigCommerce Holdings and TRIP<\/b>, Trip Advisor.\u00a0 The second ETF in this category, PNQI, <\/b>is similar but uses modified market=cap weighting with a group of largely overlapping stocks. PNQI <\/b>is rated 4.<\/b> It holds another stock with a buy rating of 4,<\/b> CDAY<\/b>, Ceridian HCM Holdings.<\/li>\n<\/ol>\n
    Current ValuEngine reports on these stocks or ETFS can be viewed<\/b> HERE<\/b><\/a><\/h5>\n

    Let\u2019s take a closer look at these three stocks.<\/p>\n

    BIGC \u2013 <\/b>BigCommerce Holdings, Inc. operates a software-as-a-service platform for small businesses, mid-markets, and large enterprises in the United States, Europe, the Middle East, Africa, the Asia-Pacific, and internationally. The company’s platform provides various services for launching and scaling e-commerce operations, including store design, catalog management, hosting, checkout, order management, reporting, and pre-integrations. As of December 31, 2021, it served approximately 60,000 online stores across industries. BigCommerce Holdings, Inc. was founded in 2009 and is headquartered in Austin, Texas. It was taken public in November 2020 and has floundered badly since its IPO.<\/p>\n

    CDAY<\/b> \u2013 Ceridian HCM Holding Inc., together with its subsidiaries, operates as a human capital management (HCM) software company in the United States, Canada, and internationally. It offers Dayforce, a cloud HCM platform that provides human resources (HR), payroll, benefits, workforce management, and talent management functionality; and Powerpay, a cloud HR and payroll solution for the small business market. The company also provides Bureau solutions for payroll and payroll-related services. It sells its solutions through direct sales force and third-party channels. The company was incorporated in 2013 and is headquartered in Minneapolis, Minnesota.<\/p>\n

    TRIP<\/b>\u2013 Trip Advisor, Inc. operates as an online travel company, primarily engaged in the provision of travel guidance products and services worldwide. The company operates in three segments: TripAdvisor Core, Viator, and The Fork. The TripAdvisor Core segment offers travel guidance platforms for travelers to discover, generate, and share authentic user-generated content in the form of ratings and reviews for destinations, points-of-interest, experiences, accommodations, restaurants, and cruises. Viator’s segment provides pure-play experiences online travel agency that evaluates businesses and enables travelers to discover and book tours, activities, and attractions from experience operators. The Fork segment provides an online marketplace that enables diners to discover and book online reservations at restaurants. TripAdvisor, Inc. was founded in 2000 and is headquartered in Needham, Massachusetts.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
    \u00a0Ticker<\/td>\nBIGC<\/b><\/td>\nCDAY<\/b><\/td>\nTRIP<\/b><\/td>\n<\/tr>\n
    Company Name<\/td>\nBigCommerce Holdings<\/b><\/td>\nCeridian HCM Holdings<\/b><\/td>\nTrip Advisor, Inc.<\/b><\/td>\n<\/tr>\n
    Market Cap, (Bllns.)<\/td>\n0.7<\/td>\n11.1<\/td>\n3.0<\/td>\n<\/tr>\n
    ValuEngine Rating<\/b><\/td>\n4<\/b><\/td>\n4<\/b><\/td>\n4<\/b><\/td>\n<\/tr>\n
    VE Forecast 1-mo. Price Return<\/b><\/td>\n+0.66%<\/td>\n+0.56%<\/td>\n+0.78%<\/b><\/td>\n<\/tr>\n
    VE Forecast 3-mo. Price Return<\/b><\/td>\n-0.16%<\/td>\n+5.83%<\/b><\/td>\n+1.81%<\/td>\n<\/tr>\n
    VE Forecast 1-yr. Price Return<\/b><\/td>\n+7.96%<\/td>\n+6.75%<\/td>\n+8.59%<\/b><\/td>\n<\/tr>\n
    Last mo. Price Return<\/td>\n-20.16%<\/td>\n-0.15%<\/b><\/td>\n-5.06%<\/td>\n<\/tr>\n
    Last 3 mo. Price Return<\/td>\n+8.28%<\/td>\n+9.03%<\/td>\n+9.93%<\/b><\/td>\n<\/tr>\n
    Last 6 mo. Price Return<\/td>\n-49.86%<\/td>\n+15.27%<\/b><\/td>\n-14.19%<\/td>\n<\/tr>\n
    Historic 1-Yr. Price Return<\/td>\n-63.27%<\/td>\n+2.95%<\/b><\/td>\n-19.11%<\/td>\n<\/tr>\n
    Historic 5-Yr Ann. Price Return<\/td>\nN\/A<\/td>\n+17.43%<\/b><\/td>\n-7.95%<\/td>\n<\/tr>\n
    Volatility<\/td>\n61.5%<\/td>\n41.9%<\/b><\/td>\n53.2%<\/td>\n<\/tr>\n
    Sharpe Ratio<\/td>\n-1.52<\/td>\n0.42<\/b><\/td>\n-0.15<\/td>\n<\/tr>\n
    Beta<\/td>\nN\/A<\/td>\n1.50<\/td>\n1.34<\/td>\n<\/tr>\n
    Undervaluation Percentile<\/td>\nN\/A<\/td>\n23<\/td>\n79<\/b><\/td>\n<\/tr>\n
    EPS Growth%<\/td>\n25.8%<\/td>\n376.1%<\/b><\/td>\n198.44%<\/td>\n<\/tr>\n
    Price\/Earnings Growth (PEG)<\/td>\n0.30<\/b><\/td>\n1.82<\/td>\n0.51<\/td>\n<\/tr>\n
    P\/B Ratio<\/td>\n10.3<\/td>\n5.3<\/td>\n3.7<\/b><\/td>\n<\/tr>\n
    P\/E Ratio<\/td>\nn\/a<\/td>\n33.9<\/b><\/td>\n101.3<\/td>\n<\/tr>\n
    Forward P\/E Ratio<\/td>\n247.5<\/td>\n76.5<\/td>\n16.7<\/b><\/td>\n<\/tr>\n
    Price\/Sales Ratio<\/td>\n2.5<\/td>\n8.9<\/td>\n2.2<\/b><\/td>\n<\/tr>\n
    Div. Yield<\/td>\n0.0%<\/td>\n0.0%<\/td>\n0.0%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
    Current ValuEngine reports on these stocks or ETFS can be viewed<\/b> HERE<\/b><\/a><\/h5>\n

    Analysis<\/b><\/p>\n

      \n
    1. The strongest point for all three of these companies is earnings growth.\u00a0 Amidst market commentary fixated on lower-than-expected year-over-year earnings growth, these companies have expanded their growth from low bases and seem poised to continue to outpace the median US stock in earnings growth.\u00a0 That said, these are small-to-midcap stocks that do not pay dividends and have above-average price volatility. While the ValuEngine 4 rating <\/b>indicates they are all above-average buying opportunities at this time, only CDAY <\/b>would be appropriate to even consider for very conservative portfolios.<\/li>\n
    2. Looking backward, Ceridian, CDAY,<\/b> has been the only stock of the three to show a profit last year and a profit over the past 5-years.\u00a0 Its five-year annualized return of 17.4% easily beats the 11.2% five-year annualized return posted by IVV, <\/b>the iShares S&P 500 ETF.<\/li>\n
    3. Trip Advisor (TRIP<\/b>) looks the least expensive of the three on a valuation basis both on traditional metrics and according to ValuEngine\u2019s valuation model. TRIP <\/b>also has the highest projected one-year return.<\/li>\n
    4. The hoopla surrounding BigCommerce\u2019s (BIGC<\/b>) 2020 IPO is all but forgotten as the firm has lost more than 60% of its introductory market value. Lately, revenues have been increasing and it may be in the early stages of a great turnaround.\u00a0 Nevertheless, BIGC <\/b>should be considered a highly speculative investment.<\/li>\n<\/ol>\n
      Financial Advisory Services based on ValuEngine research available:\u00a0 <\/b>\u00a0<\/b>www.ValuEngineCapital.com<\/b><\/a><\/h5>\n

      Summary<\/b><\/p>\n

      Our predictive models currently have very few highly ranked stocks and ETFs in the Technology Sector.\u00a0 It appears as if the sector may have gotten out of the gate well ahead of itself.\u00a0 That said, the model is identifying a few stocks and ETFs focused on internet services that it can recommend.\u00a0 As profiled, the top-ranked stock opportunities range from semi-volatile midcap to very speculative small cap so always perform your own analysis and the suitability for the account under consideration.<\/p>\n

      The big picture remains murky.\u00a0 Putting the QQQM <\/b>and IVV <\/b>returns for the first six weeks of the third quarter of 2022 (July 1 \u2013 August 15, 2002) side-by-side with this quarter, the patterns having QQQM <\/b>shooting ahead of the S&P 5-00 (as measured by IVV<\/b>) seem eerily familiar.\u00a0 The reversal of the past two weeks saw losses very similar although not quite as steep to the collapse between August 15 \u2013 August 31 2022.\u00a0 D\u00e9j\u00e0 vu all over again?<\/p>\n

      There are many economic reasons why many predict 2023 will be as bad or worse than 2022.\u00a0 The ValuEngine model currently predicts in the neighborhood of -3% retreat for IVV<\/b>\u2019s price for the next 12 months. Therefore, we don\u2019t really expect double digit declines in the averages again this year.\u00a0 Of course, we can\u2019t rule them out either.\u00a0 Market predictions are just semi-educated guesses even when they are performed by quantitative models.<\/p>\n

      _____________________________________________________________________<\/b><\/h5>\n
      By Herbert Blank<\/b><\/h5>\n
      Senior Quantitative Analyst, ValuEngine Inc<\/b><\/h5>\n
      www.ValuEngine.com<\/b><\/a><\/h5>\n
      support@ValuEngine.com<\/b><\/h5>\n
      All of the approximately 5,000 stocks, 16 sector groups, 140 industries, and 600 ETFs have been updated on<\/b> www.ValuEngine.com<\/b><\/a><\/h5>\n
      Financial Advisory Services based on ValuEngine research available through<\/b> ValuEngine Capital Management, LLC<\/b><\/a><\/h5>\n
      Free Two Week Trial to all 5,000 plus equities covered by ValuEngine<\/b> HERE<\/b><\/a><\/h5>\n

      Subscribers log in<\/b> HERE<\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

      Watching tech stocks lead the market resurgence in the first six weeks of Q1 2023, I was hit with a flash of d\u00e9j\u00e0 vu. Just six months ago, the market slaughter of the first six months of 2022 was led by a strong upsurge in the first six weeks of 2022 by beaten-up growth stocks.\u00a0 … Read more<\/a><\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[130,1,39],"tags":[1755,2145,1716,2173,2161,2162,2174,803,2172,1760,1761,1731,2160,1770,2163,2167,2166,2006,2170,2111,2164,2171,2175,1656,2168,2169,2165],"_links":{"self":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts\/3096"}],"collection":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/comments?post=3096"}],"version-history":[{"count":3,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts\/3096\/revisions"}],"predecessor-version":[{"id":3099,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/posts\/3096\/revisions\/3099"}],"wp:attachment":[{"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/media?parent=3096"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/categories?post=3096"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/blog.valuengine.com\/index.php\/wp-json\/wp\/v2\/tags?post=3096"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}