The Zacks Analyst Blog Highlights: Facebook, Global X Social Media Index ETF, First Trust US IPO Index Fund, First Trust Dow Jones Internet Index Fund and PowerShares Nasdaq Internet Portfolio
Zacks Equity Research
Updated
For Immediate Release
Chicago, IL – July 29, 2016 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Facebook (FB), Global X Social Media Index ETF (SOCL), First Trust US IPO Index Fund (FPX), First Trust Dow Jones Internet Index Fund ( FDN) and PowerShares Nasdaq Internet Portfolio (PNQI).
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Here are highlights from Thursday’s Analyst Blog:
4 ETFs to Ride Facebook’s Spectacular Quarter
Social media behemoth, Facebook (FB) delivered impressive results yet again for the second quarter of 2016 buoyed by the strength in mobile advertising business. The company surpassed our estimates on both the top and the bottom line. This sent Facebook shares up in aftermarket hours. In pre-market trading, the stock hit a record high of $128.35 at the time of writing.
Facebook Q2 Results in Detail
Adjusted earnings per share (accounting for stock-based compensation) came in at 76 cents, crushing the Zacks Consensus Estimate by 62 cents. Revenues soared 59% year over year to $6.4 billion and edged past our estimate of $6 billion. Growing advertising revenues were the primary reason for the superlative performance.
Advertising revenues grew 63% year over year to $6.2 billion. Notably, mobile advertising revenues accounted for 84% of total advertising revenues, up from 82% in the preceding quarter and 76% in the year-ago quarter (see: all the Technology ETFs here).
Daily active users grew 17% year over year to 1.13 billion with over 1 billion coming from mobile. Meanwhile, monthly active users grew 15% year over year to 1.71 billion, of whom mobile active users accounted for 1.57 billion, up 20%.
Currently, Facebook has a Zacks Rank #3 (Hold) with a top Growth Style Score of A and a solid Zacks Industry Rank in the top 34%, suggesting that the bullish trend will continue at least in the near future (read: Time to Buy These Tech ETFs?).
ETFs in Focus
Based on impressive results, investors could definitely focus on ETFs that have a larger allocation to this networking giant and grab any opportunity from a surge in the price of FB. For those investors, we have highlighted four ETFs that are poised to move upward following Q2 results:
Global X Social Media Index ETF (SOCL)
This fund is a pure play in the global social media space and has amassed $66.8 million in its asset base. The ETF charges 0.65% in fees and expenses, and sees moderate trading volumes of roughly 28,000 shares a day. The product tracks the Solactive Social Media Total Return Index, holding 31 securities in the basket. Of these firms, Facebook takes the top spot, making up roughly 10.4% of assets. In terms of country exposure, U.S. firms take more than half of the portfolio, closely followed by China (24%), Japan (9.8%) and Russia (7.6%). The fund has a Zacks ETF Rank of 2 or ‘Buy’ rating with a High risk outlook (read: Twitter Crashes Post Q2: Should You Sign Out of These ETFs? ).
First Trust US IPO Index Fund (FPX)
This ETF provides exposure to the U.S. IPO market by tracking the IPOX-100 U.S. Index. It has accumulated $582.1 million in AUM and charges 60 bps in fees a year. Volume is moderate as it exchanges nearly 73,000 shares in hand on average. In total, the fund holds 100 securities in its basket with FB at the top, having a 9.9% allocation. From a sector look, information technology takes the largest share at 32.5% while health care and consumer discretionary round off the next two spots with double-digit exposure each.
First Trust Dow Jones Internet Index Fund (FDN)
This is one of the most popular and liquid ETFs in the broad technology space with AUM of more than $3.3 billion and average daily volume of around 574,000 shares. The fund follows the Dow Jones Internet Composite Index and holds 41 stocks in its basket. Expense ratio comes in at 0.54%. Facebook occupies the top position in the basket with 9.9% of assets. While information technology makes up for 72.1% share, consumer discretionary accounts for 20.0% of assets. The product has a Zacks ETF Rank of 2 with a High risk outlook.
PowerShares Nasdaq Internet Portfolio (PNQI)
This fund follows the Nasdaq Internet Index, giving investors exposure to the broad Internet industry. The fund holds about 85 stocks in its basket with AUM of $275.7 million while charging 60 bps in fees per year. It trades in a light volume of around 27,000 shares a day. Facebook takes the second position with an 8.2% allocation. In terms of industrial exposure, Internet software and services makes up for 60.5% share in the basket, followed by Internet retail (34.8%). PNQI has a Zacks ETF Rank of 2 with a High risk outlook (read: 4 ETFs Riding on Microsoft-LinkedIn Merger News ).
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