This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Large-Cap ETFs Weather Stock Slump

These price declines have generated rising interest in the large-cap universe, particularly on the basis of valuation. "I think large-caps are very compelling right now because they are very cheap when compared to small-caps," said Rafael Resendes, portfolio manager for the Toreador Large Cap Value Fund (TORLX). "We haven't seen this level of value in large-caps in years."

Despite the attractive valuations, Resendes notes that there is still a degree of uncertainty surrounding large-cap ETFs and the market as a whole. "We're still struggling with the question of how much the economy is ultimately going to slow down," he said. "I also think the upcoming election is going to have very important implications for the market and the future of capital-gains rates."

For investors who are not sold on these ETFs or are only looking for an individual stock to fill out their portfolio, opportunity may be knocking in the form of a couple of large-caps that have been around for decades.

Posada has a long-term bullish view on International Business Machines (IBM - Get Report), one of the top holdings of her fund. In July, IBM reported second-quarter results that included a 32% increase in diluted EPS on a 13% rise in sales from a year earlier. "IBM has an ideal business model with a significant portion of its revenue coming from services and abroad," she said. "It has transformed itself into more of a software company and a service provider."

Resendes likes the refiner Valero Energy (VLO - Get Report), which he thinks has upside potential of 40% to 50% in its current stock price. "Valero is particularly interesting because it didn't participate in the commodity boom of recent months," he said. "Right now it is one of the best-positioned refiners with a lot of flexibility in its product mix."

Valero presently trades at 7.8 times future earnings.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
VUG $110.16 0.19%
VTV $83.15 -0.12%
IBM $138.00 -0.43%
VLO $72.93 -0.14%
AAPL $118.03 -0.71%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs