For next 6 month period, Camarda finds reasons to believe that the sector could outperform:
– Fundamentals are good. Current valuation is quite attractive as shown in the above table.
– Companies are expected to return growing distributions to investors in 2018, after an average -6% decline in the distribution for the whole sector in 2017.
– Technical: average return of the first 6 months of each year, over the last 5 years, had an average return of 8.4% while the average full year performance was 4.84%, implying the last 6 months of each year had negative performance. Over the last 10 years, the average return of first 6 months was 10.7% while the full year performance was 10.7%, implying the last 6 months of those 10 years, performance was flat.
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