J.C. Parets Sees Real Estate As A Big Winner This Year
J.C. Parets of Eagle Bay Solutions recently commented that real estate and homebuilders appear to be be big winners for 2015.
"Real estate so far has been the big winner this year," Parets told Benzinga. "In 2014, REITs were a big outperformer, likely due to their high dividends that became more in demand due to falling U.S. Interest Rates. But now we are seeing breakouts on a relative basis in the homebuilders themselves."
Parets liked this theme for the first quarter and thought we would "get absolute price breakouts in ITB and XHB very soon. Lumber Futures, meanwhile, are also setting up for a monster move higher so it all makes sense to us."
When looking at the U.S. Home Construction Exchange Traded Fund, Parets felt that it is poised for a breakout to the upside.
Parets noted that "SPDR also has a an ETF that they call ‘Homebuilders,’ but XHB is much more diversified in terms of its holdings....top holdings include Lumber Liquidators, a home improvement company, and Aaron’s Inc., a specialty retailer. So they include positions that don’t even “build homes.” But either way you slice it, XHB has consolidated in similar fashion to ITB over the past two years and is also [breaking] out early in 2015."
iShares Dow Jones US Home Const. (ETF) (NYSE: ITB) recently traded at $26.20, down 1.7 percent.
SPDR S&P Homebuilders (ETF) (NYSE: XHB) recently traded at $34.83, down 0.71 percent.
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