Energy, Financials, and Materials stir up some interest on Wall Street
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With the broader S&P 500 (SP500) trading near record highs, Roth Capital Partners came out and shed insight towards Energy, Financials, and Materials.
The brokerage said that Energy is out of favor to the point that its models are signaling a contrarian buy signal. The Financial sector had the most new additions to Roth Capital Partner’s best ideas portfolio, and Materials is showing signs of promise.
Energy: Regarding the Energy sector, Roth Capital Partners said: “Energy has become so out of favor we believe there may be an opportunity. We believe the best way to play this contrarian buy trade is via the (XLE) or (XOP) ETFs.” From a single stock perspective, the financial institution noted that it likes shares of Baker Hughes Company (BKR), ExxonMobil (XOM), and Diamondback Energy (FANG).
Financials: The investment firm stated: “Consumer finance is starting to come back to life.” As a result, Roth Capital Partners spotlighted two names it prefers, Capital One Financial Corporation (COF) and Discover Financial Services (DFS).
Materials: “Chemicals have started to spring to life,” with the firm highlighting shares of Corteva (CTVA). Roth Capital Partners went on to say that it is looking for better entry points for certain names. Other chemical companies on its watch list include the likes of LyondellBasell Industries (LYB), CF Industries Holdings (CF), Air Products and Chemicals (APD), and FMC Corporation (FMC).
While Roth Capital Partners did not outline any specific exchange traded funds aside from XLE and XOP, investors who are interested in learning more about the Energy, Financials, and Materials sectors can look towards broader funds for further diversification and insight towards the segments. Highlighted below are some popular funds worth noting for the three sectors:
Energy ETFs: (XLE), (AMLP), (VDE), (XOP), (OIH), and (IXC).
Financials ETFs: (XLF), (VFH), (IYF), (FNCL), (IYG), and (FXO).
Materials ETFs: (XLB), (VAW), (IYM), (FXZ), (MXI), and (RSPM).