IYF: Financials Turn Too Frothy Post-Election, A Pause Warranted

seekingalpha11-09

The financials sector led the market with a 49% return in the past year, but I recommend a hold rating on IYF due to potential consolidation.IYF's attractive P/E ratio and robust performance in 2024 ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2482458683?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1972371962/image_1972371962.jpg","is_english":true,"pubTime":"2024-11-09 04:16","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2482458683","market":"nz","top_or_hot":-1,"title":"IYF: Financials Turn Too Frothy Post-Election, A Pause Warranted","media":"seekingalpha","content":"<div>\n<p>The financials sector led the market with a 49% return in the past year, but I recommend a hold rating on IYF due to potential consolidation.IYF's attractive P/E ratio and robust performance in 2024 ...</p>\n\n<a href=\"https://seekingalpha.com/article/4735133-iyf-financials-turn-too-frothy-post-election-a-pause-warranted\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>IYF: Financials Turn Too Frothy Post-Election, A Pause Warranted</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIYF: Financials Turn Too Frothy Post-Election, A Pause Warranted\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-09 04:16 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4735133-iyf-financials-turn-too-frothy-post-election-a-pause-warranted><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The financials sector led the market with a 49% return in the past year, but I recommend a hold rating on IYF due to potential consolidation.IYF's attractive P/E ratio and robust performance in 2024 ...</p>\n\n<a href=\"https://seekingalpha.com/article/4735133-iyf-financials-turn-too-frothy-post-election-a-pause-warranted\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IYF","symbol_name":"金融指数ETF-iShares Dow Jones","start_time":0,"source_url":"https://seekingalpha.com/article/4735133-iyf-financials-turn-too-frothy-post-election-a-pause-warranted","article_id":"2482458683","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1972371962/image_1972371962.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2482458683","pubTimestamp":1731097018,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"The financials sector led the market with a 49% return in the past year, but I recommend a hold rating on IYF due to potential consolidation.IYF's attractive P/E ratio and robust performance in 2024 e","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"IYF":"金融指数ETF-iShares Dow Jones"},"translate_title":"IYF：选举后金融泡沫过多，有必要暂停","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"IYF":0.9},"content_text":"The financials sector led the market with a 49% return in the past year, but I recommend a hold rating on IYF due to potential consolidation.IYF's attractive P/E ratio and robust performance in 2024 earned it an A+ ETF Grade, yet neutral seasonality suggests a breather is needed.The ETF's portfolio is moderately concentrated with top holdings in Berkshire Hathaway and JPMorgan, posing some concentration risk despite high quality.Technical indicators show potential for a pullback, with shares possibly retreating to $107, aligning with the 50-day moving average and filling post-election gaps.   EschCollection  Financials is the best-performing sector of the market in the past year when scanning the S&P 500 sector ETFs in the past year. Gains accelerated on the day after the US election, but then took a breather into the end of the first full week of November. I have been bullish on many Financials-sector and industry funds in 2024, but I am turning more measured in my optimism. After a 49% total return in the past 52 weeks on the iShares U.S. Financials ETF (NYSEARCA:IYF), a modest ‘sell the news’ event could transpire in the Financials sector. The group still trades with an attractive P/E, but with neutral seasonality on tap and a historic rally since late last year in the books, a period of digestion is needed, in my view. I have a hold rating on the fund as 2025 nears. Financials Leading YoY, +45% Return   Seeking Alpha According to the issuer, IYF seeks to track the investment results of an index composed of U.S. equities in the financial sector. It owns shares in U.S. banks, insurers, and credit card companies and is used to express a sector view within the domestic stock market. IYF is a moderate-sized ETF with $3.5 billion in assets under management as of November 7, 2024. Its annual expense ratio is not particularly low given its straightforward exposure to a broad sector at 0.39%. The forward dividend yield is also unimpressive at just 1.23%.  But share-price momentum has been robust throughout 2024, earning IYF a perfect A+ ETF Grade by Seeking Alpha’s quantitative scoring system. The Financials sector is a cyclical-value corner of the US stock market, so it can be volatile at times, however much of this year has been a steady ascent in IYF’s share price, resulting in moderate risk metrics. Finally, liquidity is quite healthy with the ETF given the average daily volume of more than 240,000 shares and a median 30-day bid/ask spread of just four basis points, per iShares. Looking closer at the portfolio, the 4-star, Bronze-rated ETF by Morningstar plots in the top-left section of the style box, indicating its bent to large-cap value. There’s just 12% of growth exposure while a material 33% of IYF is considered SMID cap – that can add to cyclical risks as we saw in March 2023 during the Silicon Valley Bank crisis and, later, a steep interest rate increases which can harm the balance sheets of regional banks.  But with a price-to-earnings ratio of under 15, the resulting PEG ratio is attractive at under 1.5, so my neutral stance today is not based on a nosebleed valuation. IYF: Portfolio & Factor Profiles   Morningstar It’s also important to call out that IYF is not just a fund comprised of big banks. Berkshire Hathaway (BRK.A) is the biggest holding at almost 12%. JPMorgan Chase (JPM) is the next-largest position at 10%.  So, there is some concentration risk, but that pair of equities is high quality. Overall, the top 10 stocks account for 46% of IYF, so the fund is moderately concentrated. IYF: Berkshire, JPMorgan Top Holdings, Low Yield   Seeking Alpha Seasonally, I pointed out at the onset that bullish seasonality is waning, and that more neutral trends are about to ensue. October and November have been the best back-to-back months over the past 10 years, but the December through March period is actually been merely flat since 2014.  With gains already booked in November and amid bullish sentiment, we could certainly see a consolidation phase in the months to come. IYF: Weaker Seasonals December-March   Seeking Alpha The Technical Take With a modest P/E and neutral seasonals, IYF’s technical situation looks sublime on the surface, but taking caution today could be the prudent play. Notice in the chart below that shares gapped up massively on the Wednesday after the election. Technicians will quickly note that gaps commonly get filled, so immediately we see the prospect of shares retreating down to about $107. That's also close to where the rising short-term 50-day moving average would come into play. IYF has historically not drifted too far under the 50dma throughout this year during pullbacks. Also take a look at the 200dma – it's rising in its slope, suggesting that the bulls control the primary trend, but shares reached about 20% above the 200dma at its election-week high. That’s quite extended, so I would not be surprised to see that gap close over the next few months. RSI momentum, meanwhile, remains solid with the oscillator at the top of the graph ranging in a bullish zone between 50 and 75, never getting close to technical oversold conditions, which should make the bulls happy.  Finally, IYF may have gotten ahead of itself when analyzing an uptrend channel from the middle of last year. If that gap noted above gets filled, then shares could simply pull back into the channel amid profit-taking. IYF: Price Gaps Above the Uptrend Channel, Due For A Pullback/Consolidation   Stockcharts.com The Bottom Line  I have a hold rating on IYF. Shares have surged this year, but conditions might have turned too frothy post-election. While the valuation remains solid, a consolidation of gains may be in the cards through early next year.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2482458683"}