Looking for a sector to invest in for the 2024 home stretch? Health care may be the answer, if history is any indication. The Health Care Select Sector SPDR Fund (XLV) has posted a November gain in eight of the last 10 years. In December, the fund has advanced in four of the last five years. What’s more, the sector is also attractively valued relative to the broader market. Health care trades at a forward price-to-earnings ratio of 22.2, while the S & P 500 has a multiple of 24. “We think the Healthcare sector is at an attractive entry point ahead of what is historically the best month of the year. While we still see some broad risk for the overall market into the back-half of October, we would be using any weakness to add to Healthcare in anticipation of new highs into year-end,” BTIG chief market technician Jonathan Krinsky wrote. XLV .SPX YTD mountain XLV vs SPX year to date He also noted that the XLV has slid for three straight weeks, something that hasn’t happened since May 2023. “XLV is oversold as it comes into its uptrend line from April lows, providing an attractive entry point,” Krinsky said. He added that the iShares Biotechnology ETF (IBB) averages a 3.3% November gain going back to 2001. The optimism around health care comes as the sector lags the broader market. Year to date, the XLV is up 11.3%, while the S & P 500 has rallied 20.6% to record levels. Some health care names poised to do well, according to Krinsky, are Masimo and Viking Therapeutics . Masimo shares are up 19% in 2024, while Viking has skyrocketed 258% on high hopes for its experimental obesity treatment . Masimo’s CEO was recently ousted after a proxy fight with activist investor Politan Capital . Elsewhere on Wall Street this morning, Citi initiated UPS with a buy rating and a price target that implies upside of 23%. “Despite share loss to Amazon Logistics and Walmart Fulfillment Services and mix headwinds from direct-from-China mega e-tailers Temu and Shein, UPS is positioned to benefit from the end of the freight recession and start of the next upcycle, driving more profitable volumes,” Citi said.
