What Does The Average Stock Look Like?

We find that it is useful at times to step back from individual stock analysis and compare sectors to understand what are the the dynamics going on in the stock market. When we look at sectors, we look at it from an "equal-weighted" basis rather than "market-cap" basis. There are of course pros and cons to both but one particular pro for equal-weighting is it eliminates the distortions that very large market-cap stocks have on aggregate numbers and allows you to understand what are the characteristics of the "average" stock in a sector.

Starting with performance, the average stock in the Consumer Discretionary sector has gained the most over the past year meanwhile the average stock in the Materials sector has gained the least.



The Financial sector has the largest beta of any sector. Not surprisingly, Utilities has the lowest. What may catch most investors off guard, is Health Care has the second lowest beta.



Over the next four years, analysts expect Energy stocks to have the highest sales and earnings growth. The average stock in the Energy sector has actually had the highest growth in sales over the past three years, but is in the middle of the pack when it comes to earnings growth.



Least-squared Growth - 3 Years


Least-squared Growth - 3 Years


Finally, from an intangible-adjusted perspective, Financials are trading at the richest valuations and Telecom at the cheapest.