U.S. Markets closed

ETFs Set to Surge on Robust Q1 Facebook Results

Sweta Killa
Zimmer (ZBH) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

After the closing bell on Wednesday, Facebook FB greeted the Wall Street with robust first-quarter 2018 results, wherein it came up with huge revenue and earnings beat. This indicates that the social media giant easily shrugged off concerns over the data-privacy scandal involving Cambridge Analytica that broke in mid-March (read: What's in Store for Facebook ETFs This Earnings Season?).

Facebook Solid Q1 Results

Adjusted earnings per share came in at $1.69, crushing the Zacks Consensus Estimate by 33 cents and increasing 63% from the year-ago earnings. Revenues soared 49% year over year to $11.97 billion and edged past our estimate of $11.45 billion. Growing mobile advertising revenues are mainly behind the robust performance.

Advertising revenues grew 50% year over year to $11.8 billion buoyed by Instagram ad sales that continued to drive mobile advertising. Notably, mobile advertising revenues accounted for 91% of total advertising revenues, up from 89% in the year-ago quarter. Both daily and monthly active users grew 13% year over year to 1.45 billion and 2.20 billion, respectively.

Facebook will continue to invest heavily in security and preventing abuse, video content, and long-term initiatives, which center on augmented and virtual reality, artificial intelligence and connectivity. As such, the company expects operating expenses to increase 50-60% this year, higher than 32% recorded in 2017. This would have a significant impact on the company's profitability.

Market Impact

Shares of FB jumped as much as 7.6% in aftermarket hours following the earnings report. Currently, Facebook has a Zacks Rank #3 (Hold) and a top Growth Score of A, suggesting that it is primed for more growth in the coming months. Further, it belongs to a top-ranked Zacks industry (top 42%) (see: all the Technology ETFs here).

ETFs in Focus

Given this, ETF investors are seeking to bet on this networking giant. For them, we have presented six ETFs that have a larger allocation to Facebook and could see a surge in the days ahead.

Global X Social Media Index ETF SOCL

This is the pure play ETF in the global social media space and has amassed $192.1 million in its asset base. The ETF charges 0.65% in annual fees, and sees moderate trading volumes of roughly 88,000 shares a day. The product tracks the Solactive Social Media Total Return Index, holding 32 securities in the basket. Of these firms, Facebook takes the third spot, making up roughly 8.8% of assets. In terms of country exposure, U.S. firms take 48% of the portfolio, closely followed by China (31%), Japan (7%) and Russia (7%). The fund has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: 5 Reason Why FANG ETFs Lost Their Charm in March).

iShares U.S. Technology ETF IYW

This ETF tracks the Dow Jones US Technology Index, giving investors exposure to 136 technology stocks. The fund has AUM of $4 billion and charges 44 bps in fees and expenses. Volume is good as it exchanges nearly 247,000 shares in hand a day. Facebook occupies the third position in the basket with 7.4% of assets. More than half of the portfolio is allocated to software and services, while technology hardware and equipment accounts for 25.1% share. The fund has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

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 $7.1 billion and average daily volume of around 543,000 shares. The fund follows the Dow Jones Internet Composite Index and holds 42 stocks in its basket. Expense ratio comes in at 0.54%. Facebook occupies the second position with 7.7% of assets. While information technology makes up for a bigger chunk with 69.2% share, consumer discretionary accounts for 20.8% of assets. The product has a Zacks ETF Rank #2 with a High risk outlook.

ERShares Entrepreneur 30 ETF ENTR

This fund offers exposure to U.S. large-cap entrepreneurial companies with the highest market capitalization and composite scores based on six criteria. This can be easily done by tracking the Entrepreneur 30 Index. Holding 31 stocks in its basket, Facebook takes the eight spot at 7.4%. About 46% of portfolio is tilted toward technology while consumer discretionary and financials also receive double-digit exposure each. ENTR has accumulated $66.1 million in AUM. It charges 49 bps in annual fees and trades in a lower volume of 38,000 shares a day on average (read: Is the Rout in Tech ETFs Transitory?).

PowerShares Nasdaq Internet Portfolio PNQI

This fund follows the Nasdaq Internet Index, giving investors exposure to the broad Internet industry. It holds about 96 stocks in its basket with AUM of $588.8 million while charging 60 bps in fees per year. The product trades in a lower volume of around 47,000 shares a day. Facebook takes the fifth spot with 7.4% allocation. In terms of industrial exposure, Internet software and services makes up for 53.9% share in the basket, followed by Internet retail (34.9%). PNQI has a Zacks ETF Rank #3 with a High risk outlook.

Technology Select Sector SPDR Fund XLK

This is the most popular technology ETF, which follows the Technology Select Sector Index and has $19.5 billion in AUM. The fund charges 13 bps in fees per year from investors and trades in heavy volume of around 13.9 million shares a day on average. It holds about 72 securities in its basket, with Facebook occupying the third position at 6.4%. In terms of industrial exposure, the fund is widely spread across software, Internet software & services, hardware storage & peripherals, IT services, and semiconductors that make up for a double-digit allocation each. It has a Zacks ETF Rank #2 with a Medium risk outlook (read: 5 Tech ETFs in Green Despite One-Month Turmoil).

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>

  • Why Advanced Micro Devices, Inc. Stock Closed 11% Lower on Friday
    Business
    Motley Fool

    Why Advanced Micro Devices, Inc. Stock Closed 11% Lower on Friday

    Analyst Pierre Ferragu from financial firm New Street Research set his price target for AMD at $18 per share, arguing that the stock has been priced for a level of success that simply isn't realistic. "AMD's stock price reflects a scenario we don't believe possible," Ferragu wrote. In particular, Ferragu sees larger rival Intel (NASDAQ: INTC) getting its manufacturing act together as we speak.

  • Now is a ‘once-in-a-lifetime’ chance to invest in US pot companies, investor says
    Finance
    Yahoo Finance

    Now is a ‘once-in-a-lifetime’ chance to invest in US pot companies, investor says

    With some Canadian pot stocks posting triple-digit return rates this year, many retail investors have looked north to pour cash into cannabis. U.S. cannabis companies are worth a lot more than their current valuations suggest since federal illegality has put undue pressure on the industry, said David Wenger, a New York attorney and senior editor of the Cannabis Law Digest.

  • What happens if you win Mega Millions' $970M jackpot?
    News
    Associated Press

    What happens if you win Mega Millions' $970M jackpot?

    Despite the terrible odds — one in 302.5 million for those keeping score at home — someone will eventually match all six numbers and win the Mega Millions jackpot, which now stands at $970 million. Here are some answers for someone holding that prized lottery ticket for what would be the second-largest lottery jackpot in U.S. history. Lottery officials recommend winners take a deep breath, put their winning ticket in a safe spot and consult with a reputable financial planner before popping over to the lottery headquarters.

  • This Refining Giant Is the Latest Energy Company to Give Up on Its MLP
    Business
    Motley Fool

    This Refining Giant Is the Latest Energy Company to Give Up on Its MLP

    The energy sector continues to experience a gigantic consolidation wave, which is causing master limited partnerships (MLPs) to drop like flies. Valero Energy (NYSE: VLO) is behind the latest disappearing act in the space after it agreed to buy out its MLP Valero Energy Partners (NYSE: VLP). Valero Energy launched Valero Energy Partners in late 2013, joining its refining rivals in creating an income-producing vehicle that would steadily buy its parent's midstream assets.

  • Cleveland-Cliffs Has Strong Q3 2018, Reinitiates Dividend
    Finance
    Market Realist

    Cleveland-Cliffs Has Strong Q3 2018, Reinitiates Dividend

    Cleveland-Cliffs (CLF) released its third-quarter earnings today before the markets opened. Its revenue came in at $741.8 million, which was 24.3% higher YoY (year-over-year), beating analysts’ estimate of $732 million according to the consensus compiled by Thomson Reuters. In its second-quarter results, it beat the consensus estimate.

  • Cramer's 5 favorite tech stocks right now, including Appl...
    MSFT
    CNBC Videos

    Cramer's 5 favorite tech stocks right now, including Appl...

    Jim Cramer reveals his top "power" players in the information technology space, including consumer tech plays, software giants and a fintech kicker.

  • Here’s why you shouldn’t retire super early — even if you can
    Business
    MarketWatch

    Here’s why you shouldn’t retire super early — even if you can

    Despite the many perks of early retirement — waking up whenever you want, for example — it wasn’t the easiest decision. Earnings tend to peak around 48 for men and about 39 for women, according to an analysis by PayScale.

  • Suddenly Toxic, Saudi Prince Is Shunned by Investors He Courted
    World
    Bloomberg

    Suddenly Toxic, Saudi Prince Is Shunned by Investors He Courted

    Now Crown Prince Mohammed bin Salman could become the biggest risk to his own project. Everything changed when Jamal Khashoggi walked into the Saudi consulate in Istanbul on Oct. 2 and didn’t come out. Prince Mohammed, who’s denied any knowledge of Khashoggi’s fate, still has his defenders -– notably Donald Trump.

  • Why Valero Energy, eBay, and New Age Beverages Slumped Today
    Business
    Motley Fool

    Why Valero Energy, eBay, and New Age Beverages Slumped Today

    Some major market benchmarks managed to hang onto their gains, but the Nasdaq Composite, and Russell 2000 indexes posted losses of 0.5% to 1.25%, and the S&P 500 was virtually flat. Valero Energy (NYSE: VLO), eBay (NASDAQ: EBAY), and New Age Beverages (NASDAQ: NBEV) were among the worst performers on the day. Valero Energy dropped 10% after the refinery company announced that it would buy back all outstanding units of its related MLP, Valero Energy Partners (NYSE: VLP).

  • Business
    Benzinga

    Jim Cramer Shares His Thoughts On Amarin, AT&T, McDonald's And More

    On CNBC's "Mad Money Lightning Round", Jim Cramer said Arrowhead Pharmaceuticals Inc (NASDAQ: ARWR) is a great speculative stock. Cramer is willing to endorse AT&T Inc. (NYSE: T), but he thinks Verizon Communications Inc. (NYSE: VZ) offers more safety

  • This Marijuana Investment Firm's 11 Top Cannabis Picks for Explosive Growth
    Business
    Motley Fool

    This Marijuana Investment Firm's 11 Top Cannabis Picks for Explosive Growth

    The marijuana industry has become a hotbed of investment activity, and players of all sizes are looking to get into the action. On top of all the interest from ordinary investors, cannabis companies have seen demand rise from sophisticated institutional investors that have experience with deploying larger amounts of investment capital in search of high-growth opportunities. One of the most interesting marijuana investment specialists that investors can follow is Canopy Rivers (NASDAQOTH: CNPOF).

  • Kmart employee chokes up as he makes his final announcement before the store closes permanently
    Business
    Yahoo Lifestyle

    Kmart employee chokes up as he makes his final announcement before the store closes permanently

    Joshua Englert, manager of the closing Kmart store in McMurray, Penn., says a final farewell to customers. Some shoppers might be sad to see Kmart stores go, after the chain’s parent company, Sears Holdings, filed for Chapter 11 bankruptcy protection on Monday. Taking to his Facebook on Sunday evening, Englert posted a video of himself saying, “Attention, Kmart shoppers” over the store’s PA system for the very last time after working at the superstore for 18 years.

  • Marijuana investors may lose 90% of their money in Canada, so consider the really big prize elsewhere
    News
    MarketWatch

    Marijuana investors may lose 90% of their money in Canada, so consider the really big prize elsewhere

    Marijuana presents a tremendous opportunity for investors over the next few years. Naïve investors are excited. The reality is that professionals will pick their pockets, and many naïve investors who are excited now will end up losing 90% of their investment.

  • Valero to fold logistics arm back into parent company in $950 million deal
    Finance
    American City Business Journals

    Valero to fold logistics arm back into parent company in $950 million deal

    Less than five years after it was created as a master limited partnership, San Antonio-based pipeline and storage terminal company Valero Energy Partners LP is merging back with its parent company.  Valero Energy Partners (NYSE: VLP) announced after close of market on Thursday that it is merging with Valero Energy Corp. (NYSE: VLO), its general partner Valero Energy Partners GP LLC and Forest Merger Sub LLC, a subsidiary that was incorporated in Delaware as a merge vehicle by Valero on Tuesday. Under a merger agreement filed with the U.S. Securities and Exchange Commission, Valero will buy all outstanding shares of VLP stock at $42.25 per share in a transaction that is expected to be worth $950 million.

  • America’s Biggest Employer Isn’t Hiring Seasonal Employees This Year. Here’s the Reason Why
    Business
    Money

    America’s Biggest Employer Isn’t Hiring Seasonal Employees This Year. Here’s the Reason Why

    For the third year, Walmart won’t be hiring tens of thousands of seasonal employees to provide extra support during the holidays. Instead, Walmart is forgoing the long-standing practice in favor of giving it’s full- and part-time employees more hours and opportunities to earn extra cash. The idea, Walmart says, is to fulfill the wishes of many of its employees.

  • Marathon Petroleum: Analyzing the Short Interest
    Finance
    Market Realist

    Marathon Petroleum: Analyzing the Short Interest

    Will Marathon Petroleum’s Q3 Earnings Beat the Estimates? (Continued from Prior Part) Short interest in Marathon Petroleum The short interest, represented as a percentage of outstanding shares, in Marathon Petroleum (MPC) has risen from 5.4% on July

  • Hillary Clinton under fire over Lewinsky comment
    Politics
    Fox Business Videos

    Hillary Clinton under fire over Lewinsky comment

    Madison Gesiotto, National Diversity Coalition for Trump, and Democratic strategist Al Mottur on how former presidential candidate Hillary Clinton said that her husband’s affair with Monica Lewinsky was not an abuse of power.

  • The Mega Millions Jackpot Is Now $970 Million. Here's What That Could Buy
    Finance
    Fortune

    The Mega Millions Jackpot Is Now $970 Million. Here's What That Could Buy

    You know the odds of winning the Mega Millions jackpot are insanely low. The jackpot for the Mega Millions drawing, set to take place Friday, Oct. 19 at 11 p.m., is currently estimated at $970 million. Generous souls will give some of their jackpot winnings to charity or start one of their own, but if you’ve got a quirky sense of humor, it’s worth pointing out that the $970 million Mega Millions jackpot is enough to pay for a McDonald’s Happy Meal (hamburger, not Chicken McNuggets) for every person in America.

  • Why PBF Energy Inc and Other Refining Stocks Are Getting Clobbered Today
    Business
    Motley Fool

    Why PBF Energy Inc and Other Refining Stocks Are Getting Clobbered Today

    Shares of PBF Energy Inc (NYSE: PBF) tumbled as much as 10.9% on Friday, joining a sectorwide sell-off that also saw refiners Valero Energy (NYSE: VLO), Phillips 66 (NYSE: PSX), Marathon Petroleum (NYSE: MPC), and HollyFontier (NYSE: HFC) take it on the chin by sinking more than 5% at one point in the day. A trio of factors seems to be driving these declines.

  • 5 U.S. Marijuana Stocks to Buy Before the Market Lights Up
    Finance
    InvestorPlace

    5 U.S. Marijuana Stocks to Buy Before the Market Lights Up

    As such, the full range of recreational products offered by Tilray (NASDAQ:TLRY), Canopy Growth (NYSE:CGC) and their peers can now be sold throughout Canada. One question for American investors is how that affects U.S. marijuana stocks? What happened in Canada changes little in the U.S. The federal ban on marijuana remains in place.

  • Marijuana stocks to watch: Aurora Cannabis investments may be more valuable than its pot
    News
    MarketWatch

    Marijuana stocks to watch: Aurora Cannabis investments may be more valuable than its pot

    Aurora Cannabis Inc. is a major pot producer, but if its bets on other cannabis companies continue to pay off, it may be able to stop actually growing weed on its own. Aurora (ACBFF)(CA:ACB) said recently its investments were worth more than C$700 million ($540 million) as of Sept. 21, bolstered in part by demand for pot stocks ahead of full legalization of marijuana in Canada on Wednesday. As the entire sector has benefited, so has Aurora’s portfolio, boosting the company’s fiscal fourth-quarter profit to C$79.9 million, after a loss of $20.8 million the year earlier.

  • Why ServiceSource International Is Imploding Today
    Business
    Motley Fool

    Why ServiceSource International Is Imploding Today

    Shares of ServiceSource (NASDAQ: SREV), a provider of outsourced inside sales and customer service solutions, are being obliterated today. The stock is down 46% as of 11:07 a.m. EDT on Friday after the company shared preliminary third-quarter results and revised its full-year guidance.

  • News
    MarketWatch

    Cleveland-Cliffs CEO slams Goldman Sachs analyst on earnings call; 'You are a disaster'

    The chief executive of mining and resources company Cleveland-Cliffs Inc. (clf) slammed a Goldman Sachs analyst on the company's earnings call earlier Friday, accusing him of failing to understand numbers. You are an embarrassment to your parents," Lourenco Goncalves said in response to a question from another analyst on the call, according to a FactSet transcript. "Matthew Korn from Goldman Sachs, you can run, but you can't hide.

  • AMD's Q3 Earnings to Gain on Portfolio Strength & GPU Demand
    Business
    Zacks

    AMD's Q3 Earnings to Gain on Portfolio Strength & GPU Demand

    Advanced Micro Devices Inc AMD is set to report third-quarter 2018 results on Oct 24.Notably, AMD has a positive record of earnings surprises in the trailing four quarters, the average surprise being 30.97%. In the last reported quarter, earnings of 14

  • Here's Why Aphria Is the Next Marijuana Stock to List on the NYSE
    Finance
    Motley Fool

    Here's Why Aphria Is the Next Marijuana Stock to List on the NYSE

    Canada's third-largest marijuana company, Aphria Inc. (NASDAQOTH: APHQF), announced this week that it has filed to list its shares on the New York Stock Exchange. Aphria's decision to up-list its shares from the over-the-counter market to the NYSE follows in the footsteps of Canopy Growth (NYSE: CGC), which listed on the NYSE in May, and Aurora Cannabis (NASDAQOTH: ACBFF), which is expected to begin trading on the NYSE on Oct. 23.