PowerShares S&P 500 Low Volatility ETF

The CBOE Volatility Index (VIX) measures the volatility in the US stock market as represented by the S&P 500 Index (SPY) (SPX-Index).

Mutual fund ownership of equities is at the lowest level in ~13 years, while ETFs (SPY) (IVV) are gradually increasing their share in the stock market.

Quest Diagnostics (DGX) has projected a run rate savings worth $1.3 billion by the end of 2017. In 2016, it managed to save up to $1.1 billion.

McCormick (MKC) stock is covered by 14 analysts, who have rated the company a 2.8 on a scale of 1.0 (“strong buy”) to 5.0 (“strong sell”).

Stryker is a highly diversified company with a presence across the world. However, a majority of the company’s revenue, or 72%, comes from its US business.

Narayana Kocherlakota, 12th president of the Federal Reserve Bank of Minneapolis, said central banks have been able to control inflation better when left alone by the government.

Wall Street estimated that Becton, Dickinson and Company’s fiscal 4Q16 revenue will be ~$3.22 billion—growth of around 5.2% on a YoY basis.

If you’ve reached your investment horizon and have seen substantial gains, it would be wise to liquidate or reallocate to more conservative funds.

A legitimate bull market In this series, we’ve taken a look at Richard Bernstein’s views on investors’ fear of an impending bear market. In Richard Bernstein Advisors’ October Insights newsletter, he rejects the notion that the current rise in US stocks (SPLV) (OEF) has been brought about only by the Fed’s easy monetary policy. In the […]

The anticipated views of the Federal Reserve members are expected to make way for utilities (IDU) (VPU) and for low-volatility funds.

Low-volatility funds generally have higher exposure to stocks that are insulated from large swings in the broader markets.

On August 15, 2016, Zimmer Biomet Holdings (ZBH) announced the acquisition of CD Diagnostics.

Stryker (SYK) entered the robot-assisted surgery market with its acquisition of MAKO Surgical in December 2013.

Richard Bernstein Advisors is bullish on US equities. A major reason that drives its enthusiasm for US stocks is its assessment that the worst of the corporate profits recession is already over.

Analysts are expecting J.M. Smucker’s adjusted EPS to be $1.74 in fiscal 1Q17 compared to 1Q16 EPS of $1.32.

Analysts expect revenue of $2.2 billion for Hormel Foods (HRL) in fiscal 3Q16—3% higher than revenue of $2.19 billion in fiscal 3Q15.

On July 26, 2016, C.R. Bard (BCR) released its 2Q16 earnings. After the announcement, BCR’s share price rose by ~1%, driven by its better-than-expected 2Q16 results.

Analysts expect Kellogg’s revenue to be $3.36 billion for fiscal 2Q16. This represents a decline of 4% compared to revenue of $3.50 billion in 2Q15.

On July 15, 2016, Ingredion (INGR) closed at $132.84. It traded 15.6% above its 100-day moving average, 8.3% above its 50-day moving average, and 3.9% above its 20-day moving average.

As of July 15, 2016, Ingredion (INGR) was trading at $130.90. Analyst recommendations remained the same with an update in the target price.

China accounts for around one-third of Mead Johnson’s global business.

The Hershey Company (HSY) has a market cap of $24.2 billion. Its stock rose by 16.8% to close at $113.49 per share on June 30, 2016.

J.M Smucker derives its revenue from the U.S. Retail Coffee, U.S. Retail Consumer Foods, U.S. Retail Pet Foods, and the International and Foodservice segments.

The J.M. Smucker Company (SJM) reported its fiscal 4Q16 and fiscal 2016 results on June 9, 2016. The company ended fiscal 2016 with strong earnings.

With its fiscal 4Q16 earnings release, the General Mills board approved a quarterly dividend of $0.48 per share. It will be paid on August 1, 2016.

Becton Dickinson has returned ~20% over the last one year. It outperformed the S&P 500 Index, which returned around -1.2% during the same period.

Zimmer Biomet Holdings (ZBH) was trading at $116.5 as of June 17, 2016. It has a 50-day moving average of $118.5 and a 200-day moving average of $106.1.

On June 16, 2016, Varian Medical Systems (VAR) was trading at a forward PE (price-to-earnings) ratio of ~17.7x.

Varian Medical Systems (VAR), headquartered in Palo Alto, California, is a leading radiation oncology treatment device and software manufacturer. It reported revenues of approximately $3.1 billion in 2015.

Richard Bernstein Advisors’ earnings forecast for the 12-month period until June 2017 is ~$115. The S&P 500 PE multiple is ~24.

Analyzing the superior performance of stocks and bonds over the past 40 years, Bill Gross called the run a “grey swan” if not a black swan event.

Analysts are expecting J.M. Smucker’s adjusted EPS to be $1.19 in fiscal 4Q16—compared to 4Q15 EPS of $0.98. It represents a tremendous rise of 21%.

In 2016, Archer Daniels Midland’s priority is its balanced capital allocation framework. It started by selling a 50% interest in its Brazilian port in 2015.

Gundlach thinks that investors should short low volatility equity funds. People invest in them thinking that they’re safe, but they aren’t.

Altria Group (MO) released its 1Q16 earnings on April 28, 2016. Its adjusted diluted EPS (earnings per share) rose 14.3% to $0.72 in 1Q16.

On April 26, 2016, Baxter International (BAX) released its 1Q16 earnings. After the announcement, Baxter’s share price rose ~1% from $43.63 on April 25, 2016, due to the company’s better-than-expected 1Q16 results.

For fiscal 2015, Kellogg’s reported net sales fell by 7.2%. The currency-neutral adjusted net sales rose by 1.2%. Sales fell for all of the segments in 4Q15.

In 2016, Archer Daniels Midland’s priority is its balanced capital allocation framework. It started by selling a 50% interest in its Brazilian port in 2015.

In 2015, Bunge returned $549 million to shareholders through dividends and share repurchases. In 2014 and 2015, the company purchased a total of $600 million in shares.

Wall Street has estimated Baxter’s 1Q16 revenues to be about $2.4 billion, a marginal decline as compared to last quarter’s revenues of ~$2.5 billion.

With the lawsuit filed against P&G’s Old Spice, margins could contract in the coming quarter as revenue would be affected.

General Mills displayed a fifth consecutive quarter of operating margin expansion. The adjusted operating profit margin increased by 60 basis points to 15.9% compared to 15.3% in fiscal 3Q15.

The Green Giant divestiture, along with continued foreign exchange headwinds, impacted the net sales of General Mills (GIS), as anticipated by the company.

Analysts estimate that Becton Dickinson has a potential to return ~6.4% over the next 12 months. The 12-month target price for BDX is $163.10 per share.

McCormick & Company (MKC) closed at $95.84 on March 23. It is trading 10% above its 100-day moving average, 7% above its 50-day moving average, and 2% above its 20-day moving average.

CPG companies are geographically diverse and face stiff competition from internationally and nationally advertised brands across categories.

Snyder’s-Lance reported its fiscal 2015 results on February 29. The final results met the preliminary results that the company reported at the end of January.

In its preliminary results for 2Q16, Campbell Soup mentioned that it expected its adjusted EPS for the quarter to be ~$0.87. It was in line with the expectations.

WhiteWave Foods (WWAV) was expected to report revenue of $1,034 million for 4Q15, a rise of 13.5% YoY (year-over-year). The company reported $1,027 million, an increase of ~13% compared to 4Q14.

Tyson Foods’s (TSN) revenue is expected to fall by 7.2% to $10.0 billion for fiscal 1Q16. Although positive, the revenue growth has been on a declining trend.

McCormick has a dividend yield of 2.0% as of January 21. Management has raised the dividend at an average annual rate of 9.2% over the last five years.

Costco’s suppliers include companies like PepsiCo (PEP), Procter & Gamble (PG), and the Kraft Heinz Company (KHC). No single supplier accounts for over 5% of revenue.

During fiscal 1Q16, General Mills (GIS) paid $34 million in cash related to restructuring projects. In fiscal 1Q16, the company approved “Project Compass.”

General Mills’ net sales for fiscal 1Q16 fell by 1% to $4.2 billion. The foreign currency exchange effect caused the growth to fall by five percentage points.

Diamond Foods missed estimates by 12.5% for the first time in the last five quarters. It had surpassed estimates for EPS in all the four quarters of fiscal 2015.

Diamond Foods reported a fall in sales in fiscal 4Q15 of 7.9% compared to the same quarter in the prior fiscal year. It also reported net sales of $201.8 million.

Diamond Foods surpassed estimates for EPS in all the four quarters of fiscal 2015. In its last reported fiscal 4Q15, the company beat EPS estimates by 10%.

The Taylor rule is a backward-looking model used to determine short-term interest rates in an economy. Bill Gross prefers a corollary to Gresham’s law.

SPLV’s top five holdings are Plum Creek Timber (PCL), Paychex (PAYX), PepsiCo (PEP), ACE (ACE), and Republic Services (RSG).

SPLV maintains a portfolio of 100 stocks on the basis of minimal volatility. It majorly invests in the financial, consumer staples, and industrial sectors.

The PowerShares S&P 500 Low Volatility ETF (SPLV) seeks to replicate the performance result of the S&P 500 Low Volatility Index.

For the current year, SPLV’s share redemptions have exceeded share purchases, which has resulted in negative fund flow, or an outflow, for the ETF.

SPLV’s top holdings of include PepsiCo (PEP), ACE (ACE), Republic Services (RSG), Procter & Gamble (PG), and McDonald’s (MCD).

Economic growth is the biggest driver of earnings growth. Earnings growth seems to follow the same trajectory of GDP growth.

On October 20, 2015, Mead Johnson’s board of directors approved a new share repurchase authorization of $1.5 billion of the company’s common stock.

The VIX is a measure of the total implied volatility of the market. It has an inverse relationship with minimum volatility funds.

Smart beta fund indexes are tweaked to acquire active management factors such as value, quality, size, and growth.

Diamond Foods provided annual adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) guidance of $131–$136 million.

The Snacks segment offers microwave popcorn products and potato chips. The net sales for the quarter were reported $129.8 million.

In 1Q16, General Mills paid $34 million related to restructuring initiatives. The company expects to incur ~$71 million in other project-related costs.

General Mills’ total segment operating profit rose by 20% to $826 million. On a constant-currency basis, its total operating profit increased by 23%.

ConAgra Foods (CAG) recorded 1Q16 diluted earnings per share (EPS) from continuing operations at $0.38. This is in comparison to EPS of $0.22 for 1Q15.

Coffee Holding (JVA) reported its 3Q15 financial results on September 14, 2015. Net sales increased to $27.0 million compared to $26.6 million in 3Q14.

The iShares MSCI USA Minimum Volatility ETF (USMV) selects stocks for its portfolio on the basis of volatility. USMV’s top holdings include AT&T (T), McDonald’s (MCD), and AutoZone (AZO).

The iShares MSCI USA Minimum Volatility ETF (USMV) and PowerShares S&P 500 Low Volatility Portfolio (SPLV) are two smart beta ETFs that include only those stocks from the S&P 500 index (SPY) that have low volatility.

SPLV currently manages a total portfolio of $4.48 billion distributed over 100 stocks. It has a net expense ratio of 0.25%

J.M. Smucker’s (SJM) 1Q16 earnings showed strong sales growth in coffee and pet food. The results include the operations of Big Heart and Sahale Snacks, which Smucker acquired this fiscal year.

On August 27, the J.M. Smucker Company (SJM) announced results for 1Q16, which ended July 31. SJM stock rose 6.54% that day, closing at $116.29, and has been rising since.

Hain Celestial provided annual guidance for fiscal 2016. The total net sales range from $2.97 billion to $3.11 billion—a rise of ~10%–15% compared to fiscal 2015.

The Pittsburgh-based, privately owned ketchup maker H.J. Heinz Holding Corporation acquired Kraft Foods last month.

The new company, Coca-Cola European Partners PLC (or CCEP), expects to realize significant synergies from the transaction.

CVS Health posted a strong financial performance in 1Q15. Adjusted EPS in 1Q15 grew 12.2% year-over-year to $1.14. CVS came in ahead of its own guidance by a long margin.

CVS is planning to transfer Target’s generic business to Red Oak Sourcing. Target currently sources from McKesson.

In simple terms, municipal solid waste is trash or garbage discarded by households and commercial establishments.

Walmart (WMT) has a history of increasing dividends. Its stock is classified as a dividend aristocrat. At 2.4%, Walmart’s dividend yield is healthy.

Yen’s historic decline in 2013 may have magnified the benefits of currency hedging.

Here is a brief overview of some ETFs/ETPs that are designed for managing volatility: Low volatility ETFs and VIX-based ETPs.