definitive stock sector assignment?

elindholm

edited for content
Joined
Sep 14, 2002
Posts
26,831
Reaction score
8,076
Location
L.A. area
I'm looking into Ranpak (PACK), which does environmentally sustainable packaging and might be about to turn the corner toward profitability. But I'm encountering a phenomenon I haven't seen before, which is that different sources place the stock in different sectors: I've seen materials, industrials, and consumer cyclical, all for this one stock. Doesn't someone official make an official determination somewhere? Even though the lines can be blurry and can feel arbitrary (e.g. GOOGL being communications instead of information technology), I wasn't aware that this was a debatable question once a company goes public.
 

Folster

ASFN Icon
Joined
Jun 23, 2005
Posts
15,995
Reaction score
6,198
I'm looking into Ranpak (PACK), which does environmentally sustainable packaging and might be about to turn the corner toward profitability. But I'm encountering a phenomenon I haven't seen before, which is that different sources place the stock in different sectors: I've seen materials, industrials, and consumer cyclical, all for this one stock. Doesn't someone official make an official determination somewhere? Even though the lines can be blurry and can feel arbitrary (e.g. GOOGL being communications instead of information technology), I wasn't aware that this was a debatable question once a company goes public.
Industrials makes sense. Consumer cyclical isn't even one of the "official" sectors. I think SPDR sectors are considered the benchmark.

Here is the breakdown of the XLI sector industries. PACK would slot into Commercial services and supplies?

You must be registered for see images attach
 
OP
OP
elindholm

elindholm

edited for content
Joined
Sep 14, 2002
Posts
26,831
Reaction score
8,076
Location
L.A. area
Industrials makes sense. Consumer cyclical isn't even one of the "official" sectors. I think SPDR sectors are considered the benchmark.

Here is the breakdown of the XLI sector industries. PACK would slot into Commercial services and supplies?

You must be registered for see images attach
Consumer Cyclical is the more common name for Consumer Discretionary. I think of it as Con-D, but most call it Cyclical, so that's what I went with. In any case, yes, it's one of the official eleven.

I agree that Industrials seems most likely for PACK, but, like I said before, there are weird discrepancies or arbitrary nuances. Most software is Communications, but Microsoft is IT. Beer is a Consumer Staple; other alcohol is Discretionary. The line between Energy and Utilities seems to be drawn according to how far downstream the company operates, but it's not consistent.

What I'm interested in is what the single official assignment is, or whether there isn't one (which would seem weird to me, since so much analysis is sector-based).
 

Folster

ASFN Icon
Joined
Jun 23, 2005
Posts
15,995
Reaction score
6,198
Consumer Cyclical is the more common name for Consumer Discretionary. I think of it as Con-D, but most call it Cyclical, so that's what I went with. In any case, yes, it's one of the official eleven.

I agree that Industrials seems most likely for PACK, but, like I said before, there are weird discrepancies or arbitrary nuances. Most software is Communications, but Microsoft is IT. Beer is a Consumer Staple; other alcohol is Discretionary. The line between Energy and Utilities seems to be drawn according to how far downstream the company operates, but it's not consistent.

What I'm interested in is what the single official assignment is, or whether there isn't one (which would seem weird to me, since so much analysis is sector-based).

Here you go. It looks like there are two rival classification methods/groups, GICS and ICB which would explain the lack of consistency of sector classification you may see with a small cap companies on different sites.

I googled a bit and couldn't find a look-up tool.


I remember a big shake-up a few years ago where they renamed telecom, communications and moved Amazon to Con D and Google to Comm among other things. Info tech had gotten too big.

XLF is the only main sector I own. I typically like to drill down to more targeted subsectors with ETFs.
 
OP
OP
elindholm

elindholm

edited for content
Joined
Sep 14, 2002
Posts
26,831
Reaction score
8,076
Location
L.A. area
Here you go. It looks like there are two rival classification methods/groups, GICS and ICB which would explain the lack of consistency of sector classification you may see with a small cap companies on different sites.
Hmm, okay, thanks.

With my individual stocks, I strive for a sector balance that's not too far out of line with the S&P 500. That's why I care what sector a stock is in. But I don't try to track it too precisely -- for example I am relatively overweight in Energy and Utilities but underweight in Con-D. So it's sort of an academic exercise. It's surprising to me that this board isn't more sector-conscious in how they spread things around, but maybe I'm guilty of old-fashioned thinking.
 

Folster

ASFN Icon
Joined
Jun 23, 2005
Posts
15,995
Reaction score
6,198
Hmm, okay, thanks.

With my individual stocks, I strive for a sector balance that's not too far out of line with the S&P 500. That's why I care what sector a stock is in. But I don't try to track it too precisely -- for example I am relatively overweight in Energy and Utilities but underweight in Con-D. So it's sort of an academic exercise. It's surprising to me that this board isn't more sector-conscious in how they spread things around, but maybe I'm guilty of old-fashioned thinking.

I think sectors can be a bit arbitrary, particularly because as you said some of the mega caps and other companies don't fit neatly into a single sector, but it does give you a good benchmark to see how well diversified you really are. But it's not surprising that some may be concentrated considering the allure of high growth stocks and their tendency to originate in technology.

Here is my retail stock and ETF portfolio.

You must be registered for see images attach
 
OP
OP
elindholm

elindholm

edited for content
Joined
Sep 14, 2002
Posts
26,831
Reaction score
8,076
Location
L.A. area
I think sectors can be a bit arbitrary, particularly because as you said some of the mega caps and other companies don't fit neatly into a single sector, but it does give you a good benchmark to see how well diversified you really are. But it's not surprising that some may be concentrated considering the allure of high growth stocks and their tendency to originate in technology.

Here is my retail stock and ETF portfolio.

You must be registered for see images attach
We're pretty similar except in Con-D. I avoid AMZN and TSLA; beyond those, it's hard to find good picks, and when I do think I've found one, it usually bombs. It's definitely my weakest sector for both confidence and performance.

comm 9.2% (two biggest holdings: GOOGL, VOD)
energy 6.3 (ENB, NEP)
ind 10.2 (BW, LMT)
tech 25.1 (IBM, SMH)
staples 6.8 (KO, K)
health 7.8 (PFE, OGN)
util 5.3 (EIX, TEF)
con-d 7.4 (JWN, HBI)
mat 7.9 (too high and I'm trying to unload some; BHP, DD)
real 3.9 (O, AGNC)
fin 10.1 (VFH, OFS)
 

Latest posts

Members online

Forum statistics

Threads
538,930
Posts
5,282,696
Members
6,280
Latest member
alaskabustergreen
Top