PKW Holdings’ 2015 Performance Breakdown


Sep. 28 2015, Updated 9:07 a.m. ET

Buy-sell-hold recommendations

The top five holdings of the PowerShares BuyBack Achievers Portfolio (PKW) are The Home Depot (HD), Apple (AAPL), IBM (IBM), The Boeing Company (BA) and Lowe’s Companies (LOW). These top five holdings together represent 23.3% of PKW’s portfolio.

PKW invests 90% of its assets in the components of the NASDAQ US BuyBack Achiever Index. The primary objective of PKW is to follow an indexing approach to investing, mimicking the performance of this index. Analyst recommendations for the fund’s top five stocks of PKW are shown in the chart below.

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Top holdings performance

As the graph shows, apart from IBM, “buy” recommendations surpass the “sell” and “hold” recommendations for all the top stocks of PKW, indicating that Wall Street analysts are positive about the performance of PKW’s top holdings.

These top holdings’ performances are of significant importance for PKW, as the fund’s top ten holdings represent 35.41% of PKW’s total portfolio. Home Depot gave a negative return of -0.09% in the mid-August–September period, whereas Apple performed positively in the same period, with a return of 0.6%.

Valuation multiples and moving averages

The current PE (price-to-earnings) ratio of Home Depot, Apple, and IBM are 22.59, 13.02, and 8.85, respectively. The estimated TTM (trailing 12-month) PE of Home Depot, Apple, and IBM were 21.63, 12.34, and 9.19, respectively.

The current PB (price-to-book) value multiple of Home Depot, Apple, and IBM are 17.09, 5.11, and 10.31 respectively. The current PS (price-to-sales) ratio of Home Depot, Apple, and IBM are 1.75, 2.93, and 1.64, respectively. The average PE, TTM PE, PB, and PS of PKW’s total portfolio stand at 54.75, 20.41, 10.63, and 1.79, respectively.

Read on to the next part of this series, wherein we’ll take a structural overview of the iShares MSCI USA Value Factor ETF (VLUE), which takes a more fundamental approach to smart beta investing.


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