5 Top-Performing Stocks Of The Top ETF Of November

The overlooked Deep Value ETF (HM:DVP) , which carries an unfavorable Zacks ETF Rank #5 (Strong Sell) with a High risk outlook, emerged as the best-performing ETF of November. It gained 11.6%.

Most of the gains came in the first half as concerns over the delay in implementation of corporate tax cuts and the sell-off in high yield bonds made investors jittery, triggering the demand for value stocks. Additionally, the recent technology rout and North Korea new missile tests led to a further increase in demand (read: Value ETFs & Stocks to Buy on Tax Cut Delay Concerns).

Honing in on value securities ensures a safety net for investors as it includes stocks with strong fundamentals – earnings, dividends, book value and cash flow – that trade below their intrinsic value and are undervalued by the market, In fact, value stocks have the potential to deliver higher returns and exhibit lower volatility compared with growth and blend counterparts.

Let’s take a closer look at the fundamentals of DVP.

DVP in Focus

This ETF offers exposure to undervalued dividend paying stocks in the S&P 500 with solid balance sheets, earnings and strong free cash flow. It tracks the performance of the TWM Deep Value Index, charging investors 80 bps in annual fees. The product is home to 20 stocks with none accounting for more than 8.1% of the assets. It has amassed $104.3 million in its asset base and trades in a meager volume of 6,000 shares a day.

DVP is a large cap centric fund, which tend to be the most stable in an adverse economic scenario while at the same time offer capital appreciation in a booming market (see: all the Large Cap ETFs here).

Though most of the stocks in the fund’s portfolio delivered strong returns, a few were the real stars. Below we have highlighted those five best-performing stocks in the ETF with their respective positions in the fund’s basket:

Best Performing Stocks of DVP

Foot Locker (NYSE:FL) : The stock surged about 46% in October. It carries a Zacks Rank #3 (Hold) and has a VGM Score of A. It saw solid earnings estimate revision of 11 cents this month for the fiscal year and has a solid Industry Rank in the top 40%. Foot Locker occupies the ninth spot in the fund’s basket with a 4.8% share.

Macy’s (NYSE:M) : This stock occupies the second position in the fund’s basket with 7.4% allocation. It delivered incredible returns of about 28% this month and belongs to an industry having a solid Zacks Rank in the top 45%. The stock saw positive earnings estimates revision of four cents for the fiscal year in the last 30 days. The stock has a Zacks Rank #3 and a VGM Score of C.

NetApp Inc. (NASDAQ:NTAP) : This stock witnessed solid earnings estimate revision of 21 cents for the fiscal year this month. It has a Zacks Rank #1 (Strong Buy) and a VGM Score of C. NetApp gained 26.6% in November and falls in an industry having a solid Zacks Rank in the top 26%. The stock occupies the sixth position in the fund’s portfolio, making up for 5.3% share.

Gap Inc. (NYSE:GPS) : This stock takes the eight spot in the fund’s basket with 5% of the assets. It is up 25% this month and saw earnings estimate revision of four cents for this year in the past 30 days. Gap currently has a Zacks Rank #3 and a VGM Score of C. Further, it belongs to the same industry as Foot Locker (read: 4 Strong Reasons to Buy Retail ETFs Ahead of Black Friday).

L Brands Inc. (NYSE:LB) : It currently has a Zacks Rank #3 and a VGM Score of A. The stock added 23.5% in November but witnessed negative earnings estimate revision of a penny for the fiscal year over the past month. It belongs to the same industry as Foot Locker. L Brands is the seventh firm and accounts for 5.1% share in DVP.

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NetApp, Inc. (NTAP): Free Stock Analysis Report

DEEP-VALUE ETF (DVP): ETF Research Reports

Gap, Inc. (The) (GPS): Free Stock Analysis Report

Foot Locker, Inc. (FL): Free Stock Analysis Report

L Brands, Inc. (LB): Free Stock Analysis Report

Macy's Inc (M): Free Stock Analysis Report

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Zacks Investment Research