Tag Archives: industry

Oracle Beats On Earnings, Ups Buyback: Tech ETFs In Focus

After the closing bell yesterday, tech bellwether Oracle (NYSE: ORCL ) reported mixed third-quarter fiscal 2016 results. The company beat the Zacks Consensus Estimate for earnings but missed on revenues due to negative currency translations and persistent weakness in traditional software sales. Additionally, Oracle boosted its share buyback program by $10 billion (see: all the Technology ETFs here ). Oracle Q3 Earnings in Focus Earnings per share came in at 59 cents (accounting for stock-based compensation), a penny ahead of the Zacks Consensus Estimate. Revenues declined 3.4% year over year to $9.01 billion and were below our $9.17 billion estimate. While the company’s long process of shifting to the Web-based cloud computing business is paying off, it is unlikely to make up for the decline in the software business. Additionally, a strong dollar is continuously posing challenges to the company’s performance. Excluding the impact of unfavorable currency rates, revenues would have grown 1%. Cloud software platform sales climbed 57% from the year-ago quarter and accounted for 6% of the total revenue. Notably, Oracle is selling more cloud software platforms than any other company in the world, providing it an edge over the software ace Salesforce.com Inc. (NYSE: CRM ). For the fiscal fourth quarter, the world’s largest database software maker expects revenues to be down 2% to up 1% in constant currency and earnings per share between 82 cents and 85 cents. The lower end of the earnings guidance is well above the Zacks Consensus Estimate of 78 cents, reflecting some optimism in the company’s future growth. Currency headwind is expected to impact 2% growth in revenues and dilute earnings per share by a couple of cents. Impressed by solid cloud computing growth and an earnings beat, the Board of Directors of Oracle authorized additional repurchase of as much as $10 billion of stock under its existing buyback program. As per Bloomberg, it is the first expansion of the repurchase plan since September 2014 (read: Face-Off: Dividend Growth & Buyback ETF ). As a result, Oracle shares climbed as much as 5.4% in after-hours trading. Smooth trading is expected to continue in the days ahead given that the stock has a Zacks Rank #3 (Hold) and a solid Industry Rank in the top 27%, suggesting room for upside. Given this, ETFs with the highest allocation to this software giant will be in focus in the days ahead. Investors should closely monitor the movement in these funds and avoid these if the stock drags them down: iShares North American Tech-Software ETF (NYSEARCA: IGV ) This ETF provides exposure to the software segment of the broader U.S. technology space by tracking the S&P North American Technology-Software Index. The fund holds a basket of 58 securities with Oracle taking the top spot at 9.3% of total assets. It is quite popular with AUM of $639.1 million while volume is moderate as it exchanges nearly 201,000 shares a day. The product charges 48 bps in annual fees and has lost 6.3% so far this year. IGV has a Zacks ETF Rank of 1 or ‘Strong’ rating with a High risk outlook. First Trust ISE Cloud Computing Index ETF (NASDAQ: SKYY ) This fund provides exposure to cloud computing securities by tracking the ISE Cloud Computing Index. Holding about 34 stocks in the basket, Oracle takes the fifth spot at 4.2% of assets. Software firms dominate this ETF, accounting for 37.5% share while Internet software services (16.7%) and communication equipment (13.5%) round off to the next two sectors. The product has been able to manage $531.3 million in its asset base while sees good volume of about 102,000 shares a day. It has 0.60% in expense ratio and has a Zacks ETF Rank of 2 or ‘Buy’ rating with a High risk outlook. First Trust NASDAQ Technology Dividend Index ETF (NASDAQ: TDIV ) This fund provides exposure to the dividend payers within the technology sector by tracking the Nasdaq Technology Dividend Index. The product has amassed about $482.9 million in its asset base while trades in volume of around 83,000 shares per day. The ETF charges 50 bps in annual fees. In total, the fund holds about 96 securities in its basket. Of these firms, ORCL takes the seventh position, making up roughly 4.0% of the assets. In terms of industrial exposure, the fund is widely spread out across semiconductor and semiconductor equipment, diversified telecommunication services, technology hardware, storage & peripherals, and software. The fund has added 3.2% so far this year. PureFunds ISE Big Data ETF ( BDAT ) This product targets the niche corner – the big data and analytics industry – in the broad technology space. The fund follows the ISE Big Data Index, holding 32 securities in its basket. Of these, ORCL takes the sixth spot with 4% allocation. The U.S. firms dominate the portfolio with 81% share while Germany, Israel, Canada, and China make up for a decent exposure. The fund has accumulated $1 million in its asset base so far and charges a bit higher fee of 0.75%. Average daily volume is paltry at nearly 1,000 shares and BDAT is down 13.8% in the year-to-date timeframe. Link to the original post on Zacks.com

4 Energy ETFs Outperforming On Oil Rebound

Energy investors have long been waiting for oil prices to soar and energy stocks and ETFs to join the party. Though the start of 2016 was not at all joyous for oil, the commodity finally bucked the trend as evident by the 17% one-month gain and an 11.3% five-day uptick in the WTI crude ETF, the United States Oil ETF (NYSEARCA: USO ) . The picture is equally rosy for Brent crude with the United States Brent Oil (NYSEARCA: BNO ) rising 11.1% in the last five days and adding 21.1% in the last one month. Brent crude is hovering around $40 while WTI crude is around $37 at the time of writing. Though the commodity was stressed lately by soft Chinese data , the underlying momentum remained strong. Several investors turned bullish on the product. Also, the number of rigs fell to the lowest level since December 2009 (as per Baker Hughes (NYSE: BHI )) pointing to a likely fall in U.S. output. The U.S. rig count slipped to below 500 for the week ending March 4. Of these, there were 392 active oil rigs and the rest were drilling natural gas. If this was not enough, the biggest oil producing countries – Saudi Arabia and Russia – along with Qatar and Venezuela had agreed to freeze oil output at the January level. Needless to say, the move brought a fresh lease of life in the energy sector. In short, efforts from both U.S. and OPEC to shore up the oil market signal that producers are now really serious about reining in the oil rout. As far as demand is concerned, China’s crude imports surged 19.1% between January and February despite a soft economy, per Reuters. Speculation is rife that oil can reach the $50 level by the end of this year. While buoyancy was noticed in the entire energy sector, below, we highlight four energy ETFs that cashed in the most on the recent rally. First Trust ISE-Revere Natural Gas Index ETF (NYSEARCA: FCG ) This product offers exposure to the U.S. stocks that derive a substantial portion of their revenues from the exploration and production of natural gas. It follows ISE-REVERE Natural Gas Index and holds 30 stocks in its basket that are well spread out across components. The product has amassed $186.9 million in its asset base while it sees solid volume of nearly 896,000 shares per day. It charges 60 bps in annual fees from investors. The fund added 27.8% in the last one month (as of March 7, 2016). It has a Zacks ETF Rank of 3 or ‘Hold’ with ‘High’ risk outlook. PowerShares S&P SmallCap Energy Portfolio ETF (NASDAQ: PSCE ) This fund provides exposure to 33 firms by tracking the S&P SmallCap 600 Capped Energy Index. The fund has garnered about $30.9 million in its asset base while it sees a moderate volume of around 21,000 shares a day. The product is largely concentrated on the top 10 firms that collectively make up for about 60% share of the basket. About 58% of its assets is allocated to energy, equipment and services while oil, gas and consumable fuels account for the remainder. The ETF charges a fee of 29 bps annually and added 25.3% in the last one month (as of March 7, 2016). The fund has a Zacks ETF Rank #5 (Strong Sell) with a ‘High’ risk outlook. SPDR S&P Oil & Gas Equipment & Services ETF (NYSEARCA: XES ) This fund provides equal weight exposure across 42 securities by tracking the S&P Oil & Gas Equipment & Services Select Industry Index. None of the firms account for more than 3.95% of total assets. The fund has amassed $189.1 million in its asset base. The ETF has an expense ratio of 0.35% and gained 26.9% in the last one month. XES has a Zacks ETF Rank #5 with a ‘High’ risk outlook. SPDR S&P Oil & Gas Exploration & Production ETF (NYSEARCA: XOP ) This fund follows the S&P Oil & Gas Exploration & Production Select Industry Index, holding 63 stocks in its portfolio. It is well diversified across its holdings with none of the companies accounting for more than 2.96% of total assets. The ETF has been able to manage $2.01 billion in its asset base. It charges 35 bps in annual fees and expenses. The product gained 17.5% in the last one month and has a Zacks ETF Rank #4 (Sell) with a ‘High’ risk outlook. Original Post