what's the next hot sector?

Discussion in 'Trading' started by wutangfinancial, Jul 21, 2008.

  1. Any thoughts? Where's the sector rotation going?

    Just a thought: the market rebounds 27%, on average, before corporate earnings rebound. If you look for deep value plays, that rebound can be quite a bit bigger.

    I bought shares today in ERJ. Brazilian supplier of small to mid size jet liners (i.e. fuel efficient). Great company, beaten down due to rising input costs/real. Based on conservative 09 earnings estimates and a historical P/E multiple of 19, I think shares could easily double. Seems to have hit technical resistance as well.

    Still have my CAL short, so I have a hedge of sorts, if oil keeps demand from airlines lower than expected.

    Anyhow, aerospace could hold some real value. Might be a good place to rebalance some hot commodities money, if oil/precious metals resume their correction. The market always looks ahead, and the rebound could be enormous.
  2. Corey


    The Mediterranean? GULF and PMNA seem to be the only ways to play it at the moment, but I like the potential...
  3. Another company I like-LPL...LG displays, South Korean company....

    Trades at 4.5 X earnings and 2X cash flow, has insane margins. Another deep value play-it trades at just 1.2X book value...very odd for its sector. A lot of these emerging market companies can really stray from their intrinsic value...more so than most domestic shares.
    I know, I'm a bit scatter brain. Sometimes just writing down my thinking helps me, and if it helps a fellow ETer get ideas, even better.
  4. I saw the Economist front cover, too...

    I wish I had a way to play Oman and Bahrain...
  5. mwald


  6. Here's Goldman Sachs Water Conference webcast PDF. Could water (infrastructure, waste water management) be the next big thing?

    1. http://www.ge.com/files/usa/company/investor/downloads/webcast/webcast_presentation_03262008.pdf

    2. http://www.unepfi.org/fileadmin/events/2006/stockholm/Stockholm_DeaneDray.pdf

    ETFs: PHO, FIW, PIO, and CGW

    Stocks: VE, PNR, ERII, HOO, ITT, MWA, WTS (more on the 2nd PDF above)

    Some articles:


    Note - VE's Price/Free Cash Flow is around 100 and Debt/Equity ratio is about 2 .... not good during credit crisis.
  7. Banjo


  8. Good post luckylee.

    I'm long VE (high 51's) and WTR (high 15's). Will continue to add to these positions as well as buy PHO and AWK on any correction.
  9. I'm still long Oil, Oil&Gas Services, Materials (Steel, Mining). Underweight Tech.

    Short REITs, Financials, Casinos, Telcos, Media/TV.
    #10     Jul 22, 2008