Now here’s where it gets even more interesting. According to FactSet, 87 companies in the S&P 500 have issued negative earnings outlooks – a metric that far surpasses the five-year average of 74. Similarly, a meager 21 have raised their guidance – a metric that is well below its five-year average of 36. Were it not for a belief that indefatigable central banks can accomplish anything – were it not for the disappearance of bearishness altogether – might the figures have elicited some buyer trepidation?
Apparently not. The Dow is up another 280 points as I type.
Don’t get me wrong. I am “long” the assets that have held firm to their uptrends. For instance, my largest stock ETF position for several years has been iShares MSCI USA Minimum Volatility (USMV), primarily because it has not broken below its 200-day moving average.
On the other hand, on the outskirts of portfolios, there may be room for energy names that have fallen from grace. Call it contrarian. Call it value-minded. Call it whatever you would like. Yet oil will not free-fall indefinitely, and $75-$85 per barrel will return soon enough.
Individual equity enthusiasts might want to check out U.S Silica Holdings (SLCA), which announced additional stock buyback plans in late December. What’s more, as recently as October, it received a #1 rating by Forbes Magazine as the “Best American Small Company.” Exchange-traded advocates might want to consider PowerShares Small Cap Energy (PSCE).