Tag Archives: etf

Microsoft and Starbucks Are Finally Working Together

Microsoft and Starbucks are practically neighbors. The two companies are headquartered in Redmond, Washington and Seattle, respectively, which are both part of the same region. In reality it’s even closer than simply being in

Singapore ETFs In Focus Following Policy Easing

In a surprise move, the monetary authority of Singapore (MAS) eased policies on April 14, 2016. The step was taken to boost economic growth which halted in the first quarter of 2016. Notably, the Singapore Monetary Authority uses currency as a key tool to ease monetary policy rather than interest rates and resorted to a flat slope, budging from the prior target of a 0.5% annualized gain in the currency. However, no changes were made to the center of the band or the width, which is usually +/- 2%, per barrons.com. The preliminary estimates revealed that the economy grew 1.8% year over year in the first quarter of 2016, maintain the pace seen in the previous two quarters and slightly above 1.7% growth expected by the market. Sequentially, growth was flat on a seasonally-adjusted annualized basis, declining from 6.2% growth recorded in the fourth quarter and falling shy of the market expectation of 0.2% growth . MAS expects the economy to expand more moderately over the rest of the year. External shocks due to the slowdown in its major trading partners caused the worry. And if this was not enough, consumer prices in Singapore declined in February for 16 months in a row. So, the authority had to react to arrest the downtrend and revive this export-centric economy. The move instantly lowered the value of Singapore dollar which recorded the biggest plunge in eight months. Many analysts are speculating further policy easing given the dour economic scenario. Market Impact Though Singaporean stocks and the related ETFs have surged so far this year, the recent central bank comments point to the fact that the economy is reeling under pressure. China Renminbi devaluation and the recent weakness in the U.S. dollar also acted as headwinds to the Singaporean currency. Export-centric Asian economies like Singapore were thus forced to depreciate their currencies to stave off competitive pressure (probably) and rev up their exports while growth issues in China marred investing prospects of countries with close trade ties. However, the present situation is a bit dicey with the monetary easing opening room for growth while submissive central bank comments making investors wary. So, it is better to stay on the sidelines at the current level, wait for some definite improvement and obviously better entry points. The large-cap fund covering this economy’s equity market – iShares MSCI Singapore ETF (NYSEARCA: EWS ) – had a solid stretch in the last three-month period (as of April 14, 2016) gaining 16.9%. It has a Zacks ETF Rank #3 (Hold). We have briefly highlighted the ETF tracking the country below. EWS in Focus EWS is easily the most popular Singapore ETF on the market as it has about $550 million in AUM and an average daily volume of 1.8 million shares a day. The product charges 47 basis points a year from investors. With 28 stocks in its basket, this fund from iShares puts more than 50% of its total assets in the top five holdings, suggesting higher concentration risks. The financial sector actually makes up roughly half of the portfolio, leaving around 18% for industrials followed by 14.5% for telecommunication. EWS pays a solid yield of 4.06% annually (as of April 14, 2016), implying that it may be an income pick if payout levels hold. Original Post

Netflix Seen Posting Lowest EPS In Over 3 Years Next Week

With Netflix ( NFLX ) investing heavily in its global expansion, Wall Street is expecting the Internet TV service to report its lowest earnings per share in over three years when it posts first-quarter results after the close Monday. Analysts polled by Thomson Reuters expect Netflix to earn 3 cents a share in Q1, down 40% from the year-earlier quarter. That would be the company’s lowest EPS total since the fourth quarter of 2012, when it reported 2 cents in earnings per share. Netflix sales are seen rising 25% to $1.965 billion in the March quarter when it completed its international expansion, excluding China. Analysts don’t see EPS growth returning at Netflix until the fourth quarter. For the next several quarters, the focus of investors will be on subscriber growth and whether Netflix can continue to add new customers at a quick pace. In the December quarter, Netflix added 5.59 million new streaming subscribers, bringing its total to 74.76 million subscribers worldwide. Netflix added 1.56 million U.S. streaming subscribers and 4.04 million international subscribers in Q4. For the March quarter, Netflix forecast 6.1 million new streaming subscribers for a global total of 80.86 million. The Los Gatos, Calif.-based company is targeting 1.75 million new U.S. streaming subscribers and 4.35 million new international subscribers. RBC Capital Markets analyst Mark Mahaney on Friday reiterated his outperform rating on Netflix stock with a price target of 140. Netflix stock was up nearly 1%, above 111, in afternoon trading on the stock market today . “Based on intra-quarter data points, our proprietary survey work, and our model sensitivity work, we believe Street revenue/EPS estimates for Q1 are reasonable,” Mahaney said in a research report. “For the Q2 guide, we believe the Street’s outlook for roughly 600,000 domestic subscriber adds may be slightly aggressive, given uncertainty over pending price increases. But we view the Street’s international subscriber adds outlook of 2.9 million for Q2 as realistic.” Some Analysts Skeptical Of Netflix’s Prospects Other analysts are more cautious ahead of Netflix’s Q1 earnings release. In a report Friday, Mizuho Securities analyst Neil Doshi maintained his neutral rating on Netflix with price target of 120. While expectations are generally positive ahead of Netflix’s Q1 report, Doshi is concerned about the company’s continued free cash flow losses and whether it can successfully scale local original content in new international markets. FBR analyst Barton Crockett maintained his market perform rating and price target of 100. Netflix’s Q1 report “is likely to feature healthy but decelerating subscriber growth in the U.S. and a record level of growth internationally, powered by new country launches and very robust growth in Latin America,” Crockett said in a report Friday. However, Netflix’s growth appears to be plateauing in developed markets where Netflix has been available for some time, such as the U.S., U.K. and Canada, he said. “We suspect that similar maturity will arrive over the next couple of years in other developed country markets,” Crockett said. “We also believe that some investors may be overly optimistic about the degree of flow-through in second-half 2016 from U.S. price hikes.” RELATED: Netflix Stock Surges Ahead Of Q1 Earnings Report Next Week Netflix Rate Hike To Be Key Test Of Its Pricing Power