HORAN Capital Advisors

Entries for 2015

Dividend Paying Stocks Struggling Mightily

 May 6 2015     David Templeton
In a post last month we highlighted the fact value strategies and dividend paying strategies were lagging both the S&P 500 Index and the S&P 500 Growth Index over the past twelve months. Frequently the value type stocks have a dividend component that provides additional return for investors.Further confirmation that dividend paying strategies have been underperformers can be seen below. S&P Dow Jo...

Stock Buybacks Are Not A Primary Factor In Lower Wage Growth Rates

 April 29 2015     David Templeton
Recently, a number of articles have been circulating about the need for companies to use more of a firm's cash flow to pay employees a higher wage versus using the cash flow growth to fund stock buybacks. For example,How the Stock Market Destroyed The Middle Class (MarketWatch)Stock Buybacks Are Killing the American Economy (The Atlantic)Profits Are Up, But Wages Are Stagnant. This Senator Has A P...

A Further Rise In Crude Oil Prices Facing Headwinds Near Term

 April 24 2015     David Templeton
Oil rig count has fallen dramatically in the U.S., yet oil supply is continuing to pile up nearly unabated. The market is of the belief that this decline in rig count will ultimately put a halt to the supply growth.From The Blog of HORAN Capital AdvisorsRex Tillerson, CEO of Exxon Mobil (XOM), recently spoke at the IHS CeraWeek conference in Houston, TX. Tillerson believes oil prices are likely to...

Investor Letter Spring 2015: Another Weak First Quarter?

 April 23 2015     David Templeton
The first quarter of 2015 once again was a period where reported data suggests a mixed economic picture for the global economy. Interest rates declined slightly leading to positive returns for nearly all U.S. bond market segments. This was once again influenced by lower yields outside the U.S. and the strengthening Dollar. Worries about an economic slowdown have resulted in Europe, Japan and China...

Higher Yield and Value Oriented Strategies Underperforming Broader Market

 April 22 2015     David Templeton
One interesting aspect of the recent equity market advance has been the investor focus on higher quality dividend growth equities. A result of investors' search for yield is many of these higher yielding equities are trading at the higher end of their historical valuation range. Also, given the heightened focus on yield, one would expect the higher quality dividend growth equities to have outperfo...

Is This The Beginning Of A Larger Equity Market Correction?

 April 19 2015     David Templeton
Awaiting the 10% equity market correction seems to be on the minds of a number of strategists as soon as the market begins a turn lower. The last correction of greater than 10% occurred in 2011 when the S&P 500 Index declined nearly 20% between July and October 2011.Since March 23rd through Friday's close, the S&P 500 Index has declined 43 points to 2,072 or a decline of just 2%. In the first week...

Economic Surprise Indices: Bad News Might Actually Be Good News

 April 19 2015     David Templeton
One criteria investors and strategists evaluate on a regular basis is whether or not economic data that is reported on a near daily basis is exceeding or missing expectations. A commonly reviewed index is the Citigroup Economic Surprise Indices (CESI). According to Bloomberg,"The Citigroup Economic Surprise Indices are objective and quantitative measures of economic news. They are defined as weigh...

Expecting A Weak Q1 2015 Earnings Season, But Looking At Forward Guidance

 April 12 2015     David Templeton
With first quarter 2015 earnings season beginning to hit full stride in the coming two weeks, earnings growth expectations for Q1 2015 are now negative at -4.6%. The last negative quarterly growth result was Q3 2012 as can be seen in the below table from Factset.From The Blog of HORAN Capital AdvisorsSource: FactsetOut of the small percentage of S&P 500 companies that have reported to date, 70% ha...

Emerging Markets Not Out Of The Woods Yet

 April 10 2015     David Templeton
As investors seem to be expecting an increase in interest rates by the Fed to be pushed out later this year, the emerging market trade has seen a positive impact relative to its U.S. developed counterpart. As the below chart shows, on a year to date basis the iShares MSCI Emerging Markets ETF (EEM) has moved up 9% versus the S&P 500 Index return of 2%.From The Blog of HORAN Capital AdvisorsThis ri...

A Good Quarter To Be a Non-Dividend Paying Stock

 April 9 2015     David Templeton
Through the first quarter of 2015, performance would suggust it was a good time to be a non dividend payer stock. As the below table shows, the average return of the non-payers generated a return of 6.49% versus the payers average return of 1.16%. I would note, however, the average return in the quarter for both the payers and non-payers exceeded the cap weighted return of the overall S&P 500 Inde...
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