Barcharts commodities index, the benchmark for all major commodities markets, has outperformed its peers over the last two years, but that has not translated into increased earnings per share growth.
Barcharts’ BAC has grown 8.4% year-on-year, while the S&P 500 index has grown just 1.6%.
However, the index has not grown in the past 18 months, meaning Barchars earnings pershare growth has been just 2.3%.
In fact, the S & P 500 index had gained 4.6% year on year last year, while Barchards earnings percapita growth has grown by only 1.4%.
The index is now just above a record high, as it has gained over 13% since the end of the last recession in 2008.
Barratt Capital analyst Ben Barratt said the performance of the S and P 500 was a result of a weaker commodity price environment and a stronger dollar.
“It’s a very positive sign for our index, but not quite as good as it was in the last few months, when it was trading around 70 cents to the dollar,” Barratt told CNBC.
“Barchart is going to be able to grow their share price over the next year or two.
The market has been growing, and that is what the index is about.”
Barrath said the index could grow at a similar rate as it did during the recession, which ended in March 2011, but he noted that while it could do well in the next couple of years, it would have to be a bigger winner in the long run.
“If the commodity markets do pick up in the coming months, then that would probably be a positive sign,” Barrath said.
“I would say it is not the end game, but it would certainly be better than the last couple of quarters.”BARCLAY TO BUY A NEW STOCK BONDED TO A COMMODITY INDEX: A ‘THEY’ ARE HAVING A CONVERSATION