The Zacks Analyst Blog Highlights: PureFunds ISE Junior Silver ETF, SPDR S&P Technology Hardware ETF, PowerShares Dynamic Semiconductors ETF, SPDR S&P Health Care Services ETF and PowerShares DWA Utilities Momentum ETF
For Immediate Release
Chicago, IL – August 23, 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 PureFunds ISE Junior Silver ETF (SILJ), SPDR S&P Technology Hardware ETF (XTH), PowerShares Dynamic Semiconductors ETF (PSI), SPDR S&P Health Care Services ETF ( XHS) and PowerShares DWA Utilities Momentum ETF (PUI).
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Here are highlights from Monday’s Analyst Blog:
ETF Winners and Losers from Earnings Season
The Q2 2016 earnings season is just about to end with 94.8% companies of the S&P 500 having come up with their results. Earnings from the S&P 500 so far have decreased 3.3% this season with the beat ratio being 71.7%. Revenues nudged up 0.1% and has a beat ratio of 53.8% as noted by the August 18 issue of the Earnings Trend s.
Estimates for the current period (for Q3 of 2016) are being cut with negativity taking an upper hand lately from expectations of flat earnings at the start of the quarter. Energy weakness is very much there on the scorecard as on an ex-energy basis, earnings grew 0.3% on 2.5% on revenue growth.
Whatever the case, investors must be interested in finding out which sectors and their related ETFs are leading or lagging in the Q2 earnings season. To do so, we have analyzed the sector ETF performance for the last one month to zero in on the top ETF winners and losers from the season. Below we profile those products.
Winners
PureFunds ISE Junior Silver ETF (SILJ) – Up 17.3%
Silver prices soared lately on a precious metal rally. While safe-haven demand has boosted the metal amid global growth issues, a pickup in manufacturing activity in the U.S. and hints of stabilization in the Chinese economy also acted as tailwinds for silver (read: Forget Gold, Buy Silver ETFs Instead).
Notably, silver has high usage in industrial activity with about 50% of total demand coming from industrial applications. No wonder, silver mining ETFs have cashed in on this trend. The Zacks Industry Rank of the silver mining sector is in the top 5%, at the time of writing.
SPDR S&P Technology Hardware ETF ( XTH) – Up 11%
This earnings season fared well for the tech space with tech-heavy Nasdaq 100 ETF gaining about 3.4% in the last one month (as of August 19, 2016) compared with 0.7% gains recorded by the S&P 500-based SPY. Notably, technology is one of two sectors with the highest proportion of positive surprises, as per the Earnings Trends issued on August 18 (read: Time to Buy These Tech ETFs?).
Already Q2 results from 93.9% of the tech sector’s total market capitalization in the S&P 500 index are out. Going by the Earnings Trends report, total earnings for the tech companies were down 0.3% while revenues increased 2.9%. As much as 83.3% beat EPS estimates while 74.1% surpassed revenue expectations. This pushed this technology ETF higher in the last one month (as of August 19, 2016).
PowerShares Dynamic Semiconductors ETF (PSI) – Up 9.9%
This semiconductor ETF recorded healthy gains in the last one month as the major companies – Texas Instruments, Intel, QUALCOMM and Micron Technology – reported better-than-expected earnings.
On the revenue front, Intel reported in line with our estimate and Micron Technology lagged. However, revenues of Texas Instruments and QUALCOMM outpaced the Zacks Consensus Estimate (read: Semiconductor ETFs Shine On Q2 Earnings Beat ).
Apart from earnings, this value-centric corner of the traditional tech area, has been on radar due to a still-edgy investing backdrop. Higher demand from emerging technology applications like tablets and smartphones despite still-subdued PC shipments acted as tailwinds to the space (read: Best ETFs of July).
Losers
SPDR S&P Health Care Services ETF (XHS) – Down 7.4%
Though several pharma companies came up with estimate-beating earnings in Q2, overall earnings growth of the medical sector slowed to 4.7% in Q2 from 7.6% in Q1. Revenue growth also slackened to 7.7% in Q2 from 9.4% in Q1 as per the Earnings Trends issued on August 18. Maybe the health care services ETF fell out favor due to this slowdown in growth rates (read: Pharma ETFs Soaring on Solid Q2 Earnings).
PowerShares DWA Utilities Momentum ETF (PUI) – Down 4.6%
The utility sector failed to impress in its second-quarter results with earnings barely beating lowered estimates and revenues coming in lower than expectations. This is true for some of the major players in the space. As a result, utility ETFs like PUI underperformed in the last one month (as of August 19, 2016) (read: Utility ETFs Down Post Mixed Q2 Earnings).
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PF ISE-JS SC ME (SILJ): ETF Research Reports
SPDR-SP TEC HDW (XTH): ETF Research Reports
PWRSH-DYN SEMI (PSI): ETF Research Reports
PWRSH-DW UTL MO (PUI): ETF Research Reports
SPDR-SP HLTH CR (XHS): ETF Research Reports
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