Internet, Cotton And Energy
ETFs Lead First Quarter
TRANG HO, INVESTOR'S BUSINESS
Posted 03/31/2011 05:32 PM ET
strong uptrend lifted most ETFs in the first quarter
and pushed the leaders even higher, while Japan's epic
tragedy and political upheaval in the Middle East pummeled
an unlucky few.
leaders — including cotton, Internet software and energy
ETFs — held their ground during the February to March
correction and never closed below their 50-day moving
averages. IPath DJ-UBS Cotton ETN (BAL),
up 42.7%, led all non-leveraged ETFs in Q1.
globally trying to take advantage of high prices are
dedicating more land to cotton over other crops. That
will sharply increase supplies next year and send prices
plunging, says Shawn Hackett, president of Hackett Financial
year's U.S. cotton acreage is projected to increase
15% from last year to 12.6 million acres, according
to the U.S. Department of Agriculture's Prospective
Plantings report released Thursday. "Cotton acreage
increases are expected in every state," the USDA
Internet HLDRs (BHH), up 39.8% in Q1,
owes its performance to a 92% weighting in Ariba (ARBA)
business software maker has accelerated sales growth
the past four quarters from flat to 3% to 11% to 13%
to 20%. Analysts expect it to grow sales by 19% to 30%
the next four quarters. But earnings growth has decelerated
the past three quarters from 27% to 12% to 11% to -5%.
has an 8% weighting in Internet Capital Group (ICGE)
and BAL share an IBD Relative Strength Rating of 97,
indicating they're rising faster than 97% of issues
in the market. They also share a B Accumulation/Distribution
Rating, which shows institutions are heavily buying
S&P SmallCap Energy (PSCE) vaulted
25% as oil climbed 17% in the quarter. Oil ended the
quarter at a 2 1/2-year high of $106.72 a barrel, as
the greenback weakened for a fourth straight month and
civil unrest hampered production in Libya, Africa's
third-largest oil producer.
Energy (GPOR), ION Geophysical (IO)
and Holly (HOC) led the portfolio with
gains of 51% to 58% for the quarter. Gulfport's earnings
have ranged from 283% to 52% the past four quarters,
while sales fired up 41% to 54%. It has an RS Rating
of 99 and an Acc/Dis Rating of A-.
Robinson raised its price target on Gulfport shares
Thursday and rated them a buy. The company sold 4.8
million shares at $32 apiece. It intends to use the
amount raised, about $73 million, to buy Utica Shale,
for capital expenditures and to repay debt.
X Uranium (URA), down 27.5%, crashed the most
of all non-leveraged ETFs following Japan's earthquake
and tsunami, which ignited a nuclear crisis.
dumped stocks of the nuclear fuel fund over concerns
that countries would replace nuclear energy in favor
of more politically safe fossil fuels.
closed seven plants and Italy put a one-year moratorium
on plans to revive nuclear energy. Japan has shuttered
contend the market overreacted and nuclear energy is
the cleanest fuel and key to reducing carbon emissions.
S&P 500 VIX Short-Term Futures ETN (VXX)
fell 21.9% in Q1. The ETN, meant to profit from rising
volatility in the S&P 500, has cratered 93% since
it began trading two years ago owing to contango.
ETN tracks a position holding short-term volatility
futures and loses money when it sells the front-month
contract to buy a later-month contract to maintain its
Vectors Egypt Index (EGPT) sank 20%
in the first quarter as massive protests overthrew the
president and the country shut down its exchange for
nearly two months.
Eck halted issuing creation units of the ETF during
that time, although shares continued to trade on the
has traded like a closed-end fund, with its price rising
as much as 20% above its net asset value.