IDEXX Labs

I would like to use the current "black time" to structure my portfolio better and diversify it more. So far, I have overweighted some sectors rather arbitrarily, while others are completely absent. 😅

In order to achieve a more sound, sectoral diversification, I have looked at two things:

1. the long-term performance of the sectors in the S&P 500

2. the maximum drawdowns of these sectors over different time periods

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The following table shows the average annual returns of the S&P 500 sectors over 10, 20, 30 and 40 years.

It is striking: Some sectors have performed significantly better than others over longer periods of time. Particularly noteworthy are

- Information technology

- Healthcare

- Consumer staples (cyclical consumption)

These sectors achieved long-term average annual returns of over 10% p.a.

By contrast, the following sectors performed less convincingly:

- Energy

- Materials (basic materials)

- Real estate

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Unfortunately, historical drawdown data by sector is limited and not uniformly available. Nevertheless, a clear trend can be identified: The available data shows that defensive sectors tend to have lower drawdowns, while cyclical sectors are more prone to larger declines. So it looks like sectors such as consumer discretionary and healthcare tend to have lower maximum drawdowns, while sectors such as financials and energy have had the sharpest declines.

In the next step, I looked at the current (2024) market weighting of the sectors in the S&P 500, i.e. a market capitalization-weighted allocation as a passive ETF would reflect it:

Information Technology 28%

Healthcare 13 %

Financial services 12 %

Consumer Discretionary 10%

Communication services 8 %

Industry 8 %

Consumer staples 6 %

Energy 4 %

Utilities 3 %

Materials 2.5 %

Real estate 2.5 %

This is the first time I realize how much you have to overweight or underweight a sector in order to have the greatest probability of hypothetically beating the market in a fictitious, ideal scenario by means of sectoral overweighting and underweighting.

For example, only a weighting of well over 28% in information technology would have led to a possible outperformance.

Conversely, only a complete abandonment of the real estate sector could have made a positive contribution. (in retrospect)

Of course, this is a gross oversimplification, as each sector consists of a large number of companies of very different quality. Nevertheless, valuable insights for the strategic portfolio orientation can be derived from this.

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But now I'm at a crossroads.

Option A

I analyze current valuation ratios such as P/E ratios, Shiller P/E ratios or earnings growth per sector and decide on this basis which sectors appear most attractive for the future, i.e. an active, forward-looking approach.

Option B (my favorite):

I take my cue from long-term, historical average returns and risks and use them as a guide for strategic allocation - in other words, a more rule-based approach with a rational derivation.

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My sectoral target portfolio, based on risk-return profile and personal preference, could look like this:

Let's start from the back, the weakest sectors such as energy, real estate, utilities and basic materials have proven to be underperforming and often volatile over the long term. In total, I would therefore like to limit these to a maximum of 10% of my portfolio.

Industry 8 %

Financial services with 9 %

Communication services 10 %

Consumer staples with 13 %,

Healthcare 15 %

Consumer staples 15%

Information technology 20 %

The above weighting aims to create a portfolio that is both growth-oriented and risk-optimized in the long term.

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Conclusion 🤓

With this train of thought, I am pursuing a systematic and long-term approach that takes both opportunities and risks into account. The aim is to create a portfolio that remains stable and profitable in different market phases. Of course, it will not always be easy to implement these weightings perfectly in practice, but this strategy provides a clear direction as a basis.

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Sources 🤯

www.portfoliovisualizer.com

www.spglobal.com/spdji

JP Morgan Asset Management - Guide to the Markets

www.ishares.com

www.vanguard.com Principles for Investing Success

Global Industry Classification Standard (GICS)

www.investopedia.com

www.bogleheads.org

7 Comentários

Dividendenopi👴@Dividendenopi

6Mês

$REGN

•

Tenbagger2024

@Tenbagger2024

8Mês·

Idexx Laboratories goes one better and shares rise to a four-month high

$$IDXX (+0,88%)

Idexx Laboratories ( IDXX ) clearly exceeded Wall Street's expectations for the fourth quarter on Monday. Idexx shares reached a four-month high.

Idexx manufactures diagnostic products for veterinary practices. In the December quarter, the company earned 2.62 dollars per share on sales of 954 million dollars. On a purely balance sheet basis, profit rose by 13 percent, while turnover increased by 6 percent. Both figures exceeded forecasts, said Ryan Daniels, analyst at William Blair, in a report to clients.

Daniels acknowledged that a decline in vet visits weighed on Idexx shares. However, higher prices and an increase in the number of new pets - thanks in part to the "pandemic puppy boom" - should help offset some of the slump in vet visits, he said.

"We believe the aging pet population will begin as early as this year and peak in 2030 or 2031, creating a growing need for veterinary care (especially diagnostics), which will provide a solid long-term tailwind for the industry," he said.

On the stock market today, shares of Idexx rose more than 11% to 470.29. It was the first time since September that shares rose above their 200-day moving average.

Mixed forecast from Idexx Laboratories

Notably, recurring revenue from pet diagnostics rose 6% in the three months to December 31. This was in line with Idexx Laboratories' forecast of organic growth of 5.8 % to 6.4 %.

For the year, Idexx forecast sales of just under 4.06 to 4.17 billion dollars. The midpoint of the forecast was below analysts' projection of $4.14 billion, William Blair's Daniels said. However, the midpoint of the company's profit forecast exceeded expectations. Idexx expects earnings of 11.74 to 12.24 dollars per share.

Daniels maintained his Outperform rating on Idexx shares.

"Overall, we still view the veterinary market as a safe investment area due to its resilience to recessions, strong pricing power, lack of political risk and favorable demographics," he said.

https://www.investors.com/news/technology/idexx-laboratories-earnings-q4-2024-idexx-stock/

Wachstums_Aktionär

@schokosahne

1Ano·

$IDXX (+0,88%) an exciting company that will cover the industrial sector for me.

For me as a growth investor, it is very difficult or hardly possible to invest in various areas, but since I have the plants as the biggest point in this company, there is of course an industry behind it to produce them.

I go there with a nice phrase "you don't have to dance at every wedding"

The company's returns have really been very strong and it is in a growing market, because as prosperity increases, so does the motivation to own pets and this should continue to develop very strongly and this company will be able to secure a lot of market share.

Returns are not everything, so it is a fundamentally very good company, the debt is easily covered by equity and the company will keep buying back its own shares, which can be thrown onto the market if a takeover has to be made or things go badly. You can see that the management is acting in the interests of the shareholders.

Sales are also eps and ebitda is also rising nicely.

The valuation is of course sporty, but with solid quality companies you have to accept it. Now I will be preparing my chart analysis in the next few days to determine entry points and work out important chart areas.

Have a nice day 🙌

Market News

@MarketNewsUpdate

3Ano·

𝗠𝗮𝗿𝗸𝗲𝘁 𝗡𝗲𝘄𝘀 🗞️

𝗠𝗶𝘁 𝗦𝘁𝗮𝗿𝗸𝘄𝗶𝗻𝗱 𝘇𝘂 𝗦𝘁𝗿𝗼𝗺, 𝗙𝗿𝗲𝘀𝗵 𝗙𝗼𝗼𝗱 𝗮𝘂𝘀 𝗱𝗲𝗿 𝗞𝗼𝗰𝗵𝗯𝗼𝘅 , 🚨 𝗖𝗿𝘆𝗽𝘁𝗼-𝗪𝗮𝗿𝗻𝗶𝗻𝗴 🚨

𝗘𝘅-𝗗𝗮𝘁𝗲𝘀 📅

As of today, among others, ASML ($ASME (+0,11%)), Brown & Brown ($BTW (+0,1%)), CrossAmerican Partners ($CAPL), Diana Shipping ($DSZ (+1,52%)), Luby's ($LUB), Metro City Bank ($MCBS (+0%)), MarketAxess ($MWI (+0,41%)), Minerals Technologies Inc. ($MNK (+0%)), Northern Technologies International Corp. ($NTIC), Del Taco ($22L) and VSE Corp. ($VSEC (+1,31%)) traded ex-dividend.

𝗤𝘂𝗮𝗿𝘁𝗮𝗹𝘀𝘇𝗮𝗵𝗹𝗲𝗻 📈

Things are really busy again, so here are the main companies reporting their numbers today. Today BP ($BPE5 (-0,59%)), HelloFresh ($HFG (-0,72%)), IDEXX Laboratories ($IX1 (+0,88%)), OSRAM ($OSR), Pfizer ($PFE (+0,15%)), Prudential Financial ($PLL (+0,1%)), Ralph Lauren Corp. ($PRL (+0,55%)), Samsung SDI ($XSDG (+13,24%)), The Western Union Company ($W3U (-1,05%)), T-Mobile US ($TM5 (+0,48%)), Under Armour ($U9R (-0,02%)) and Yamaha Corp. ($YHA (-0,35%)) presented their figures.

𝗠𝗮𝗿𝗸𝗲𝘁𝘀 🏛️

Wind Energy - So far in 2021, 345 wind turbines with a total capacity of 1.4 gigawatts have been connected to the grid. Compared to the same period last year, this is an increase of over 50%. Currently, the same number of turbines have already been erected in the current year 2021 as in the entire previous year. According to the president of the German Wind Energy Association, it is possible to reach the total capacity of 2 gigawatts of commissioned plants this year.

HelloFresh ($HFG (-0,72%)) - HelloFresh has raised its revenue forecast to thanks to strong growth in the current fiscal year up to and including October another time. Core revenue increased from €970 million to €1.416 billion compared to the same period last year. This was due to strong customer growth and a continued high order rate, as well as high average order values. Adjusted operating profit margin before interest, taxes, depreciation and amortization is forecast to be between 8.25 and 10.25 percent.

𝗖𝗿𝘆𝗽𝘁𝗼 💎

Squid Game - The coin with the acronym SQUID, which alludes to the unprecedentedly successful Netflix series Squid Game, shocked the crypto scene yesterday. The coin launched last Thursday at a starting price of $0.01. Within 4 days, the price increased by an incredible 380,000.00% to $38 on Monday morning. After further growth, the price rose to $89 on the same day. However, the journey was not to end here. Within 3 hours, events rolled over. The price of SQUID grew to an incredible $2,861.80 and just 5 minutes later the coin crashed by 99.99% to $0.0007926.

Additionally, the website that promoted the coin is no longer online. It is now also known that many holders of SQUID were no longer able to sell their positions from a certain point, so they could only watch idly. It is therefore a so-called rug-pull, i.e. that the developers of the project have sold it and have gone underground with the profits. In addition, it is now also clear that there are no connections to Netflix or other representatives of the series.

Please see this story as a warning (🚨) of what can happen when investing imprudently in small-cap meme coins. Many investors have lost their money without a chance to get it back. Inform yourself before you invest. You can see exactly which points you should pay attention to on our Instagram page in the coming days.