Cloud Hosting

Buying an exchange-traded fund (ETF) can be a great way to gain diversified exposure to a specific sector, industry group or investment theme. You can buy a whole basket of individual stocks with just one click of the mouse (or tap of the finger).

For instance, in May, I recommended my Cycle 9 Alert readers make a bullish play on the SPDR Biotech ETF (NYSE: XBI).

I wanted them to have exposure to the entire biotech space during its search-for-a-vaccine rally. And even though a viable vaccine has yet to be announced, we rode that rally for a net gain of 113% in just two months! (Note: We bought options on the ETF.)

Of course, while buying a diversified ETF will give you exposure to a broad sector, industry group or theme you could instead buy only the ETFs top stocks.

That is, if you have a method for determining which of the ETFs individual stock holdings are top, and which are not.

This way, youll filter out the companies that will drag down the ETFs overall performance!

And thats what my new ETF X-Ray is all about.

Ill run each of the individual stock holdings of a popular ETF through my six-factor Green Zone Ratings model showing you which ones are top-rated and which may be best to avoid.

Lets get straight to it with todays ETF X-Ray!

Global X manages the Global X Cloud Computing ETF (Nasdaq: CLOU). This fund company focuses on disruptor sector ETFs for its investors.

Ive seen Global Xs president speak at the Inside ETFs conference Ive attended the past two years. I really like that this suite of ETFs gives investors access to some of the most innovative and cutting-edge investment themes out there right now including Internet of Thingsand cloud computing (CLOU).

These Digital 2.0 technologies are growing at double-digit rates and driving innovations across multiple sectors. And Global Xs suite of disruptor-sector ETFs is a great way to gain one-click access to them.

That said, lets take an X-Ray look at the Global X Cloud Computer ETF through the lens of my six-factor Green Zone Ratings model.

The table below shows the ETFs individual stock holdings, along with the Overall Rating theyve earned on my six-factor model.

Note that Im presenting two tables

The left side is sorted by the weight that each stock holds in the ETF. The stock at the top (Zoom, ZM) has the largest allocation of the ETFs assets.

The right side is sorted by my rating systems Overall Rating, so its easy to spot which stocks are top-rated.

Youll see the two largest holdings in Global Xs cloud-computer ETF are Zoom Video Communications (ZM) and Twilio (TWLO), with each stock making up over 6% of the ETFs holdings.

As I see it, these are companies that benefit from functionality that cloud computing affords and not necessarily pure-play cloud companies.

Whats more, while both are hyped glamour stocks (and are having great years!) they arent as proven as the likes of Amazon (AMZN), Alphabet (GOOGL) and Microsoft (MSFT), all three of which rate higher than Zoom and Twilio on my quality, value and volatility factor ratings.

Otherwise, one company you may not have heard of before is SPS Commerce (Nasdaq: SPSC). Its barely grown out of the small-cap category, with a market cap of just $2.7 billion.

SPS Commerce offers supply-chain management software solutions on the cloud. And though its a lesser-known name, its growing like gangbusters earnings-per-share are up 78% annually for the past three years!

This cloud-leveraging company is certainly worth a close look.

One last thing a plug for the cloud-computing consultant I just recommended yesterday in my Green Zone Fortunes newsletter.

This global-leader tech consultant is an expert in all things Digital 2.0, not just the cloud. And Amazon selected this company as a Premier Partner of its market-share leading AWS cloud platform, making it the go-to choice for any company wanting to get onto the cloud.

Frankly, I was shocked to find this company isnt a holding of the Global X Cloud Computer ETF it rates an 87 overall on my Green Zone stock rating model, and my two-year profit target for the stock is 80% above current prices.

Stay tuned! Ill have details for how you can sign up to get that pick and many more in the coming days!

To good profits,

Adam ODell, CMT

Chief Investment Strategist,Money & Markets

Read the rest here:
The Top Green Zone Stocks in This Tech Disruptor Sector - Money and Markets