PSCT - PSCT: Lofty Multiples Fragile Margins Make This ETF Unattractive

Summary

• PSCT is supposed to track the capped float-adjusted market-cap-weighted index consisting of the S&P 600 IT companies.
• PSCT has a questionable valuation manifested in an earnings yield below 2% together with Price/Sales of about 3x, and not completely faultless quality.
• However, there are a few strong growth stories inside; my calculations reveal it has robust weighted-average growth rates, including forward EBITDA (17.2%), Earnings per Share (19.4%), and revenue (11.4%).
• Owing to the soft quality and valuation issues, I find its factor exposure insufficient for a bullish thesis.

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