Best ETFs For June 2021

A portfolio of outlier stocks can become chock full of monster gains for years to come, if chosen wisely.

But wouldn’t it be great if there was already a collection of outliers we could buy without even having to think about it?

Well maybe there is a way to do just that… through outlier ETFs.

So, here I’m going to give you the best ETFs that big money is getting involved in this month.

First thing’s first: to find them, I looked at all the ETFs making Big Money signals. I did that by heading over to MAPsignals.com and then looked at the Big Money ETF Buys and Sells chart. I looked at days with the biggest buying, circled here:

Once I had all the ETFs, I wanted to know which were the best potential opportunities. ETFs are baskets of stocks. And because MAPsignals scores over 6,000 stocks every day, as long as I know which stocks make up the ETFs, I can rank them all.

Here are the 5 best ETFs with scores: The Composite score, Technical score, and Fundamental score. These were computed by accounting for each components stock’s score and its associated weighting in the ETF. (keep in mind that weightings will change from time to time)

Below we see each ETF, their recent Big Money activity, and their scores. XLF, ITB, and XLC are top ranked ETFs. That makes sense because financials, home builders, and communications stocks have been leading the market much of this year so far.

IGV and ARKG, however, rank low on our list of ETFs. But there is opportunity here because the low scores are due to weak technicals. Big Money has been selling these ETFs, largely because they are heavily concentrated in growth stocks. But these stocks have excellent fundamentals: growing sales and earnings and big profits. These weak ETFs represent great potential bargains.

Let’s quickly look at the year-to-date performance of these 5 ETFs:

  • XLF +29.3%
  • ITB +29.2%
  • XLC +13.5%
  • IGV -4.0%
  • ARKG -18.1%

Now let’s quickly look at Big Money buying in the ETFs. Each chart below has many green bars which represents unusually large buying. The few red bars represent unusually large selling. What jumps out is the huge buying in all the ETFs.

Only with IGV and ARKG, there was recent selling too. But again, selling on ETFs and stocks with great fundamentals represents a value opportunity.

Source: www.mapsignals.com, End of day data sourced from Tiingo.com

Here’s why I like these ETFs: they are highly concentrated with fundamentally superior stocks. Below we see a table of three stocks in each ETF. They are some of the highest weightings in each.

Notice their fundamental scores are very strong on a scale from 0-100. This means strong growing sales, earnings, and profits over one and three years. This is how MAPsignals boils down all its fundamental research into one elegant score.

Now with XLF, ITB, and XLC – we see the stocks also have strong technical scores. That means Big Money has been pouring into them, lifting them to new highs. They are buoyant with Big Money support. But in IGV and AKG, we see weak technical scores. This means Big Money has been exiting the stocks.

But before you get spooked, let’s keep the recent environment in mind: Growth has fallen out of favor while value and reopen stocks have become all the rage. But it’s essential to remember these growth companies create phenomenal products and services enhancing our lives. I don’t foresee that stopping in the future. The recent selling is temporary and thematic.

What really drives this home is looking at how long-term Big Money buying can lead to monstrous gains. Below are charts showing all the instances these stocks were Top stocks in our research since 2015: our weekly report of outliers. We don’t need to go into details on each chart.

I’d like you to notice a few things:

  • When Big Money buying pours in, stocks go up
  • Repeated outliers, especially for years often means outsized gains

Owning outlier stocks is the way I try to beat markets. Easy exposure to many stocks can be achieved by buying ETFs. But just like anything, you must be in the 1% if you want to be in the 1%.

We can find outlier ETFs by tracking the Big Money. But that alone isn’t enough: when we catalog the components and find outlier stocks underneath… that’s the winning recipe.

So, there you have it: the 5 best ETFs that Big Money has been trafficking in recently. Outlier ETFs hold outlier stocks. Finding them is the key to finding potentially outlier gains.

Now let’s look at what those look like:

Source: www.mapsignals.com, End of day data sourced from Tiingo.com

The Bottom Line

XLF, ITB, XLC, IGV, & ARKG represent top ETFs for June 2021. Financials, homebuilders, & Communications stocks have performed well lately, which should continue. Software and Genomics companies have reached interesting levels, too. Paying attention to the fundamental quality of ETF constituents is paramount.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions GOOGL, CRM, & REGN in managed accounts, but no positions in XLF, ITB, XLC, IGV, ARKG, BLK, SCHW, SPGI, DHI, LEN, LOW, FB, ATVI, ADBE, MSFT, TDOC, & VRTX at the time of publication.

Investment Research Disclaimer

Regeneron Pharmaceuticals Tops Profit Estimates; Stock Has Over 30% Upside Potential

Westchester County, New York-based biotechnology company, Regeneron reported better-than-expected profit in the fourth quarter, largely driven by a rebound in demand for its eye drug, sending its shares up over 3% on Friday.

Regeneron said its fourth-quarter 2020 revenues increased 30% to $2.42 billion and GAAP diluted EPS was $10.24 per share and non-GAAP diluted EPS was $9.53 per share. That was higher than the Wall Street consensus estimate of $8.23 per share.

Following this upbeat result, Regeneron shares, which surged over 28% in 2020, rose as much as 3.2% to $514.97 on Friday.

Executive Comments

“In 2021, in addition to our ongoing work on COVID-19, we expect further diversified growth driven by continued EYLEA momentum, expanded approvals and increased market penetration for Dupixent, and new launches for Libtayo in oncology. We anticipate U.S. regulatory action for Libtayo in both non-small cell lung cancer and basal cell carcinoma within the next month – and anticipate additional readouts later this year from across our oncology pipeline, including the bispecific platform,” said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron.

Regeneron Stock Price Forecast

Fourteen analysts who offered stock ratings for Regeneron in the last three months forecast the average price in 12 months at $673.55 with a high forecast of $793.00 and a low forecast of $553.00.

The average price target represents a 32.63% increase from the last price of $507.86. From those 14 analysts, 11 rated “Buy”, three rated “Hold”, and none rate “Sell”, according to Tipranks.

Morgan Stanley gave a base target price of $553 with a high of $975 under a bull scenario and $407 under the worst-case scenario. The firm currently has an “Equal-weight” rating on the biotechnology company’s stock.

“We are Equal-weight Regeneron as we believe potential upside factors such as success from Libtayo in NSCLC and the early stage bi-specific pipeline, is offset by potential risks from international reference pricing and pressures to Eylea,” said Matthew Harrison, equity analyst at Morgan Stanley.

Several other analysts have also recently commented on the stock. Credit Suisse raised the price target to $758 from $736. Citigroup upped the price objective to $584 from $575. Benchmark upgraded stock’s rating to buy from hold and set $590 price target. BofA Global Research lowered price objective to $595 from $625. Bernstein cut price target to $600 from $700.

Check out FX Empire’s earnings calendar

Regeneron Nears Chart Support After Antibody Cocktail Approval

Regeneron Pharmaceuticals, Inc. (REGN) gained 0.94% Monday after The Food and Drug Administration (FDA) fast-tracked emergency authorization over the weekend of the biopharmaceutical company’s coronavirus dual monoclonal antibody treatment REGN-COV2.

The experimental therapy – given to President Trump when he contacted the deadly disease last month – works by binding antibodies to the coronavirus’ spike protein, limiting the ability of viruses to escape. In other words, the therapy attempts to speed up a patient’s immune system in preparation to fight the disease at its onset. Although the cocktail of drugs continues to undergo testing, the FDA said early results suggest the drug may reduce COVID-19-related hospitalization or emergency visits in patients at high risk for disease progression.

The development comes as the United States on Sunday reported 142,732 new infections and registered a record number of hospitalizations for the 13th consecutive day. “The emergency authorization of these monoclonal antibodies administered together offers health care providers another tool in combating the pandemic,” Patrizia Cavazzoni, M.D., acting director of the FDA’s Center for Drug Evaluation and Research, told the Wall Street Journal.

As of Nov. 24, 2020, Regeneron has a market capitalization of $55.87 billion and trades nearly 10% lower over the last month. However, the shares have returned 39.45% year to date (YTD). From a valuation standpoint, the company trades at a 41% discount to its five-year forward earnings multiple of around 22 times.

Wall Street View

Truist analyst Robyn Karnauskas raised the firm’s price target on Regeneron earlier this month to $770 from $750 while reiterating a ‘Buy’ rating. Karnauskas cited the company’s impressive Q3 Eylea and Dupi sales, as well as its pipeline execution ability during the pandemic, for the price upgrade. She also believes multiple potential approvals in 2021 will support further upside.

Sentiment elsewhere on the Street remains mostly bullish. The stock receives 13 ‘Buy’ ratings, 2 ‘Overweight’ ratings, and 11 ‘Hold’ ratings. Price targets range between $793 and $550, with the median 12-month target pegged at $675. This implies a healthy premium of 29% to Monday’s $523.61 close.

Technical Outlook and Trading Tactics

Since topping out at nearly $665 a share in mid-July, the price has traded mostly sideways to lower as investors waited for testing results of the company’s COVID-19 treatments. More recently, the stock slipped below the closely watched 200-day simple moving average (SMA) last week but found buying support yesterday near a four-month horizontal trendline.

Those who anticipate a reversal at these levels should target a move back to the 52-week/ATH at $664.64 while protecting capital with a stop-loss order placed beneath the November low at $509.34.

For a look at today’s earnings schedule, check out our earnings calendar.