Sources: New Constructs, LLC and company filings
ProShares UltraPro Dow30 ETF (UDOW) is the top-rated Large Cap Blend ETF and earns a very attractive rating.
Ark Innovation ETF (ARKK) is the worst-rated Large Cap Blend ETF and earns a very dangerous rating.
Stratasys (SSYS: $23/share) is one of our least favorite stocks held by ARKK and earns our Dangerous rating. Since Stratasys went public in 2012, its NOPAT has fallen from $19 million to -$33 million. In addition to falling profits, Stratasys currently earns a bottom quintile -9% ROIC, which is down from 1% in 2012. Despite the stock being down almost 80% from its record high, Stratasys shares could fall even further as the expectations baked into the stock price remain unrealistic. To justify the current price of $23/share, Stratasys must immediately achieve 1% pre-tax margins (-40% in 2014) and grow revenues by 27% compounded annually for the next 16 years. Investors would be wise to steer clear of SSYS.
Figures 3 shows the rating landscape of all Large Cap Blend ETFs.
Figure 3: Separating the Best ETFs From the Worst ETFs
Sources: New Constructs, LLC and company filings
Disclosure: David Trainer and Thaxston McKee receive no compensation to write about any specific stock, style, or theme.