This ETF Hasn't Ended March Lower in 10 Years

The food and beverage sector has tended to outperform in March, with Tyson Foods, Inc. (NYSE:TSN) and Conagra Brands Inc (NYSE:CAG) leading the way

Feb 28, 2017 at 11:47 AM
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The March-through-May period has historically been one of the best times to own stocks. For March, specifically, food and beverage stocks have tended to outperform. In fact, according to data from Schaeffer's Senior Quantitative Analyst Rocky White, the PowerShares Dynamic Food & Beverage ETF (PBJ) has turned in a positive trading performance in March for the past 10 years! On average, the shares of PBJ have added 3.7% -- which includes a 7.1% surge in 2013.

PBJ shares March returns

The shares have spent the past year making volatile intraday swings, though its range has been defined by an annual low of $31.53, hit on April 15, and a record peak of $34.74, tagged on July 25. More recently, the exchange-traded fund (ETF) was seen trading at $33.36 -- just below its year-to-date breakeven mark at $33.47, and up 4.6% year-over-year. Meanwhile, the shares are heading into historically bullish March riding atop newfound support from their 50-day moving average.

PBJ daily price chart

Tyson Foods, Conagra Brands Among Best Stocks to Own in March

Among specific PowerShares Dynamic Food & Beverage ETF (PBJ) components, chicken producer Tyson Foods, Inc. (NYSE:TSN) and packaged food firm Conagra Brands Inc (NYSE:CAG) are on the list of best stocks to own next month. In the past 10 years, TSN has averaged a March return of 6.2%, while CAG has gained an average of 4.9%. Both stocks have been higher 90% of the time.

Now appears to be an opportune time to bet on the near-term trajectories of both TSN and CAG with options, too. Tyson's Schaeffer's Volatility Index (SVI) of 23% ranks in the 19th percentile of its annual range, while Conagra's SVI of 18% is docked below 93% of all comparable readings taken in the past year. In other words, low volatility expectations are currently being priced into the stocks' short-term options -- a boon to premium buyers.

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