Summary
XLC: Alphabet And Meta Just Keep Churning
I reiterate a Hold rating on the Communication Services Select Sector SPDR ETF (XLC) due to lackluster technicals and weak relative performance. XLC's valuation has improved with low P/E ratios, but long-term EPS growth remains modest at 6.22%, resulting in a PEG above 2.0x. Heavy concentration in GOOGL and META (36% combined) means sector performance hinges on these names, which currently lack near-term catalysts.
Don't Overlook the Potential of Communication Services ETFs
When the topic of sector tilts enters the conversation, one sector that might currently be flying under the radar is the communication services sector. Key Takeaways: The communication services sector has not had a breakout performance as of yet this year, but investors may be overlooking the sector's value.
XLC Is Down 8.78% Year to Date and the Catalysts That Matter Most Are Still Ahead
Communication Services Select Sector SPDR Fund (NYSEARCA:XLC) is down 8.78% year to date, and the two stocks most responsible for that slide are the ones you need to watch most closely over the next 12 months.
Communication Services Select Sector SPDR Fund Investors
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| TJD Thomas John Drogan PR Inc.IPAL SECURITIES Inc. | 40,334 | $4.45M | $4.37M | -$84,662.77 | -1.9% |
| DI David Izzi Brown, LISLE/CUMMINGS Inc. | 100 | $9,681 | $10,824 | $1,143 | 11.81% |
 Timothy M. Bidwell Hazlett, BURT & WATSON Inc. | 547 | $63,723.72 | $59,207.28 | -$4,516.44 | -7.09% |
 Stonebridge Capital Management Stonebridge Capital Management Inc. | 1,900 | $203,547 | $210,558 | $7,011 | 3.44% |
| BN Beth Nauman UNIVEST FINANCIAL Corp. | 10,272 | $1.21M | $1.14M | -$67,400.8 | -5.57% |
Communication Services Select Sector SPDR Fund (XLC) FAQ
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Communication Services Select Sector SPDR Fund Profile
| ARCA Exchange | US Country |
Overview
The company operates as an investment fund, dedicating its resources predominantly to securities within the Communication Services sector. It adheres to a strategy of investing at least 95% of its total assets in securities that make up its benchmark index. This index encompasses companies recognized as part of the Communication Services sector by the Global Industry Classification Standard (GICS®), spanning a variety of industries such as diversified telecommunication services, wireless telecommunication services, media, entertainment, and interactive media & services. The fund's investment approach is characterized by a non-diversified stance, focusing intensively on a specific sector to potentially capitalize on its growth and development.
Products and Services
- Diversified Telecommunication Services
This component of the fund's portfolio focuses on companies providing a broad range of telecommunication services. These may include fixed-line telephony, data transmission, and other value-added services. The investments aim at capitalizing on the infrastructure and service delivery capabilities of leading companies in this sub-sector.
- Wireless Telecommunication Services
Investments under this category target companies specialized in mobile communication services. This includes cellular phone services, wireless internet access, and other services provided over wireless networks. The segment recognizes the growing demand for mobile connectivity and aims to leverage the growth prospects of leading providers.
- Media
Focusing on companies engaged in content creation, distribution, and broadcasting, this area spans traditional media outlets as well as new-age digital platforms. The investment strategy here aims to tap into the evolving landscape of how content is consumed and monetized across the globe.
- Entertainment
This sector covers companies offering entertainment products and services, including film production, television programming, and interactive gaming. The fund looks to benefit from the consumer demand for entertainment, investing in companies poised for growth or demonstrating strong market presence.
- Interactive Media & Services
Here, the focus is on companies that provide platforms for digital and social media, search engines, and online services that facilitate interactive communication and content sharing among users. Recognizing the significant impact of the internet and digital technologies on global communication, investments aim at leading companies innovating in this space.
