Category Archives: oud

Inside Dynamic Europe ETF By First Trust

Ongoing policy easing and hopes for further stimulus have put the spotlight on European stocks and their related ETFs. Recently, one of the renowned ETF issuers, First Trust, introduced a product in the U.S. targeting Europe. The launched product – the First Trust RiverFront Dynamic Europe ETF (NASDAQ: RFEU ) – hit the market on April 13. Below, we highlight the product in detail: RFEU in Focus The fund provides exposure to European companies through investments in common stock, depositary receipts and real estate investment trusts, and forward foreign currency exchange contracts. It is an actively managed fund and does not track any index. The fund employs a dynamic currency hedging strategy by using forward foreign currency exchange contracts and currency spot transactions to hedge the fund’s currency exposure either partially or fully. RiverFront is the sub-advisor to the fund and is responsible for managing the portfolio. The fund advisor will perform top-down analysis of liquidity, investability and data availability to narrow the investable universe down to roughly fifty specific country and regional geographic markets. Then, on the basis of both quantitative and qualitative factors, stocks are selected. RFEU is a well-diversified fund, where Anheuser-Busch InBev (NYSE: BUD ) takes the top spot with 4.15% weight, followed by Unilever (NYSE: UL ) and Siemens ( OTCPK:SIEGY ) with over 3% exposure each. The rest of the stocks don’t account for more than 2.6% of the portfolio individually. In total, the fund holds about 296 stocks. Sector-wise, Consumer Staples gets the highest exposure with 18.2% of the portfolio. Industrials, Consumer Discretionary, Financials and Healthcare also get double-digit exposure in the basket. As far as country exposure goes, France (21.1%) gets the top priority, while Germany (19.7%), United Kingdom (17.9%) and Spain (10.3%) take up the next three positions. The fund charges about 83 bps in fees. As per ETF.com , RFEU has already amassed $25.8 million in its asset base. The fund is up 1.3% in the last 10 days (as of April 25, 2016). How Does it Fit in a Portfolio? RFEU is a good choice for investors seeking capital appreciation through exposure to European stocks. Additionally, the ETF will also provide diversification benefits to investors. Meanwhile, in March, the ECB came up with a more intensified economic stimulus and opted for multiple rate cuts and the expansion of its quantitative easing program to boost the economy. Monthly asset purchases were raised to EUR 80 billion from EUR 60 billion previously. So, the launch of the new ETF targeting this market seems well timed. ETF Competition The newly launched ETF will have to face competition from Europe-focused ETFs like the Vanguard FTSE Europe ETF (NYSEARCA: VGK ). VGK is one of the most popular ETFs in the space, with an asset base of $14.1 billion and average trading volume of 5.1 million shares. The fund tracks the FTSE Developed Europe All Cap Index and charges 12 basis points as fees, which is much lower than the aforementioned product. The iShares MSCI EMU ETF (BATS: EZU ) is another popular fund in the space, with an asset base of $12.8 billion and trades in a good volume of more than 8 million shares a day. The fund tracks the MSCI EMU Index. The fund charges 47 basis points as fees (see all European Equity ETFs here ). Apart from these, RFEU could also face competition from the iShares Europe ETF (NYSEARCA: IEV ) tracking the S&P Europe 350 Index. The fund has an asset base of $2.7 billion and volume of almost 835,000 shares a day. It has an expense ratio of 60 bps. Thus, the newly launched fund is costlier than the popular ETFs in the space. So, to garner investors’ money, the fund needs to sell its actively managed strategy and hope for some outperformance over traditional benchmarks as well. Original Post

Amazon Earnings Top 5 Things You Need To Know For Thursday

On slate for Thursday are quarterly earnings reports from Amazon ( AMZN ), LinkedIn ( LNKD ), Baidu ( BIDU ) and Gilead Sciences ( GILD ) after the close. Before the market open, investors will get their first look at first-quarter economic growth. Amazon The e-commerce giant is expected to earn 58 cents a share in Q1, swinging to a profit from a 12-cent loss last year. Revenue is projected to climb 23% to $27.99 billion. Last quarter, Amazon fell well short of earnings estimates and came up light on revenue, sending shares down as much as 32% from their high in the following weeks. But its cloud computing division, Amazon Web Services, is a bright spot. It hauled in $2.4 billion in revenue for the quarter, up 69% year over year. Shares are flirting with being within the lower boundary of a buy range from a cup-with-handle base with a 603.34 buy point, which it initially broke out of a few weeks ago. Amazon fell 1.7% to 606.57 after falling to 601.28 intraday. LinkedIn The professional social network’s earnings are projected to grow 5% to 60 cents ex items, a sharp drop from the 54% growth that it saw in the prior quarter. Revenue is expected to jump 30% to $828.5 million. Shares dropped 44% on LinkedIn’s last quarterly report, which showed weak Q1 guidance. LinkedIn stock has climbed off of its low, reached in the following days, and is now trading 54% below its 52-week high. Facebook Social networking leader Facebook ( FB ) crushed Q1 earnings and revenue projections late Wednesday, sending shares up 9% in late trade. If Facebook’s positive action continues into Thursday’s session, the stock will likely be in buy range from a cup-with-handle base with a 117.09 buy point. Baidu China Internet giant Baidu is projected to see Q1 EPS ex items fall 11% to 5.96 RMB (92 cents). Revenue is estimated to rise 24% to 15.83 billion RMB ($2.4 billion). Baidu’s mobile ecosystem is strong, according to ITG Research analyst Henry Guo. He said this week that his firm’s data indicates “that Baidu’s Mobile Search app dominates the mobile search market with more than 23% installation penetration among Chinese mobile users, well ahead of its key competitors Sogou Search (1.7%) and Qihoo 360 Technology ( QIHU ) Search (0.2%).” Baidu is trading just below buy range from a cup-with-handle base that it broke out of recently. It’s trading 13% below its 52-week high. Gilead Sciences The biotech’s earnings are estimated to rise 6% to $3.13 a share, slower than last quarter’s 37% growth. Revenue is seen rising 7% to $8.1 billion, also a deceleration from the prior quarter. Comparisons are getting tougher after Gilead earnings and sales skyrocketed on hepatitis C treatments. Gilead retook its 200-day line last week but breached that level in Wednesday’s session. Shares are trading 18% below their 52-week high. Fellow big-cap biotech Amgen ( AMGN ) also reports quarterly results Thursday, with analysts expected a 5% EPS gain. Amgen, which fell 1.1% to 161 on Thursday is near a buy point at 165.33 in cup-shaped base. Before the market open, biotechs Alexion Pharmaceuticals ( ALXN ) and Celgene ( CELG ) report, along with big pharma Bristol-Myers Squibb ( BMY ) and AbbVie ( ABBV ) makes a rival hepatitis C treatment. Q1 GDP After Q4’s OK but not great 1.4% gain, coupled with ongoing issues regarding a strong dollar, weak energy sector and sluggish manufacturing, weak growth is expected in Q1. Wall Street expects a scant 0.7% annualized gain.

First Solar Stock Tanks On $100 Mil Sales Miss; CFO Takes Reins

First Solar ( FSLR ) stock was torched late Wednesday when the No. 1 installer reported Q1 sales that missed Wall Street’s mark by more than $100 million and announced that CFO Mark Widmar would succeed CEO James Hughes. In after-hours trading, First Solar stock was down 4.5% after closing up 1.3% in the regular session. Shares are down 6% since January, outperforming No. 2 rival SunPower ( SPWR ) stock, which is down 27% over the past four months. For Q1, First Solar reported $848 million in sales, up 3% year over year, and $1.66 earnings per share, swinging from a 62-cent per-share loss in the year-earlier period. Sales fell $94 million sequentially and missed analyst views for $106% year-over-year growth. But EPS topped expectations for 93 cents. First Solar blamed the timing of systems-revenue recognition for the sequential drop in sales, but noted the plunge was partially offset by higher revenue from the Desert Stateline project. The company bumped up the low end of its full-year EPS guidance to $4.10-$4.50 from earlier expectations for $4-$4.50. EPS would be down 20% at the midpoint of guidance, potentially signaling a trough , according to Deutsche Bank analyst Vishal Shah. Full-year sales guidance for $3.8 billion to $4 billion was unchanged and would be up 9% at the midpoint. Chairman Michael Ahearn praised Hughes for his four years of leadership. His exit had not been expected. “Leadership succession planning has been a joint effort between Jim and the board of directors,” First Solar spokesman Steve Krum told IBD via email. “All parties are supportive of this change, which was part of an existing plan. The board and Jim believe that Mark’s proven leadership and expertise make him an ideal choice for leading the company into its next phase of growth.” Hughes will officially step down June 30, but will remain on the board and continue in an advisory role. “Under Jim’s astute guidance, First Solar achieved the strongest technology position in our history, with record bookings of new business and unparalleled financial strength in the industry,” Ahearn said in a statement.