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Semiconductor ETFs to Watch Post Intel's Q1 Earnings

Sweta Killa
Investors could tap the dip in INTC stock with the help of ETFs that have a large allocation to the biggest semiconductor company.

Intel INTC, the world’s largest chipmaker, reported stronger-than-expected Q1 results after market close yesterday but offered a weak guidance.

Earnings of 89 cents per share came in a couple of cents above the Zacks Consensus Estimate and improved from the year-ago earnings of 87 cents. Revenues were flat year over year at $16.1 billion and well ahead of the estimated $16.01 billion (read: Chip ETFs Hitting Highs Ahead of Q1 Earnings).

Intel expects revenues of $15.6 billion and earnings per share of 89 cents for the second quarter. It is well below the current Zacks Consensus Estimate of $16.81 billion for revenues and $1.01 for earnings per share. For 2019, the company slashed its forecast for revenues from $71.5 billion to $69 billion and earnings per share from $4.60 to $4.35. The Zacks Consensus Estimate is currently pegged at $70.77 billion for revenues and $4.51 for earnings per share.

Notably, the new revenue outlook points to a decline from $70.8 billion in 2018 and the company’s first revenue drop since 2015. The reduced guidance added to the concerns that an industry-wide chip slowdown could persist until the end of 2019.

The weak outlook has pushed shares of Intel down more than 7% in after-market hours on elevated volume. Intel has a Zacks Rank #3 (Hold) and VGM Score of B. Additionally, the stock belongs to the top-ranked industry (top 24%).

ETFs to Tap

As a result, investors could definitely tap the dip in INTC stock with the help of ETFs that have a large allocation to the biggest semiconductor company (see: all the Technology ETFs here).

VanEck Vectors Semiconductor ETF SMH

This fund provides exposure to 25 securities by tracking the MVIS US Listed Semiconductor 25 Index. Intel occupies the top position with 13.7% of the assets. The product has managed assets worth $1.1 billion and charges 35 bps in annual fees and expenses. It is heavily traded with volume of around 6.8 million shares per day and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

iShares PHLX Semiconductor ETF SOXX

This ETF follows the PHLX SOX Semiconductor Sector Index and offers exposure to 30 U.S. firms with INTC taking the fifth spot with 7.5% allocation. The fund has amassed $1.3 billion in its asset base and trades in volume of about 773,000 shares a day. The product charges a fee of 47 bps a year from investors and has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Chipmakers on Fire: ETFs & Stocks Soaring to New Highs).

First Trust Nasdaq Semiconductor ETF FTXL

This fund offers exposure to the most-liquid U.S. semiconductor securities based on volatility, value and growth by tracking the Nasdaq US Smart Semiconductor Index. Holding 30 stocks in its basket, Intel is the fourth firm accounting for 7.8% share. FTXL has accumulated $31.8 million in AUM and trades in average daily volume of 10,000 shares. It charges 0.60% in expense ratio and has a Zacks ETF Rank #3.

Invesco Dynamic Semiconductors ETF PSI

This fund tracks the Dynamic Semiconductor Intellidex Index, holding 29 securities in the basket. Intel occupies the third position and makes up for 5.2% share in the basket. PSI has a lower AUM of $205 million and sees moderate average daily volume of about 40,000 shares. It charges 61 bps in annual fees and carries a Zacks ETF Rank #3 with a High risk outlook (read: Will Semiconductor ETFs' Best Start to a Year Last Long?).

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First Trust NASDAQ Semiconductor ETF (FTXL): ETF Research Reports
 
Invesco Dynamic Semiconductors ETF (PSI): ETF Research Reports
 
VanEck Vectors Semiconductor ETF (SMH): ETF Research Reports
 
iShares PHLX Semiconductor ETF (SOXX): ETF Research Reports
 
Intel Corporation (INTC) : Free Stock Analysis Report
 
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