XLY: Consumer Discretionary Dashboard For December
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Fred PiardInvesting Group LeaderFollow5ShareSavePlay(8min)CommentsSummaryConsumer services are notably undervalued by 15% versus 11-year averages and exhibit strong quality metrics, while retailing and auto/components are overvalued by 20%–23%.Despite recent underperformance, XLY has outperformed the S&P 500 long-term, with higher volatility and similar risk-adjusted returns.All capital-weighted ETFs in the sector have significant exposure to Amazon and Tesla, raising concentration risk.Nine stocks were cheaper than their peers in December. P_Wei/iStock Unreleased via Getty Images This monthly article offers a top-down analysis of the consumer discretionary sector based on value, quality, and momentum metrics. It may also help analyze sector ETFs such as the State Street® Consumer DiscretionaryThis article was written byFred Piard16.24K FollowersFollowFred Piard, PhD. is a quantitative analyst and IT professional with over 30 years of experience working in technology. He is the author of three books and has been investing in data-driven systematic strategies since 2010. Fred runs the investing group Quantitative Risk & Value where he shares a portfolio invested in quality dividend stocks, and companies at the forefront of tech innovation. Fred also supplies market risk indicators, a real estate strategy, a bond strategy, and an income strategy in closed-end funds. Learn more.Analyst’s Disclosure:I/we have a beneficial long position in the shares of AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.