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Semiconductor ETFs to Tap Intel's Dip Post Q2 Earnings
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Intel (INTC - Free Report) , the world’s largest chipmaker, reported stronger-than-expected Q2 results after the market closed yesterday. The company surpassed estimates for both revenues and earnings and increased its full-year outlook. However, revenue growth at its fastest-growing data center business came below analysts’ expectation and took a toll on shares (read: What's in Store for Chip ETFs in Q2 Earnings?).
Intel Q2 Earnings in Focus
Earnings of $1.04 per share came in 5 cents above the Zacks Consensus Estimate and improved from the year-ago earnings of 58 cents. Revenues rose 15% year over year to $16.96 billion and were well ahead of the estimated $16.91 billion.
Revenues at data center business grew 27% to $5.5 billion, much lower than the analysts’ expectation of $5.61 billion. This somewhat disappointed investors as the segment has been the main driving force behind Intel's recent growth.
Intel expects revenues in the range of $17.6-$18.6 billion and earnings per share of $1.10-$1.20 cents for the third quarter. The mid-point is well above the current Zacks Consensus Estimate of $17.6 billion for revenues and $1.08 for earnings per share. For 2018, the company raised its revenue guidance by about $2 billion to $68.50-$70.50 billion and earnings per share by 30 cents to $3.94-$4.36. The Zacks Consensus Estimate is currently pegged at $68.63 billion for revenues and $4.03 for earnings per share.
Despite the solid results, shares of Intel dropped 5.7% in after-market hours on elevated volume. The beaten down price could be a solid entry point for investors, given that Intel has a top Zacks Rank #1 (Strong Buy) and a VGM Score of A. Additionally, the stock belongs to the top-ranked industry (top 4%).
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).
This fund provides exposure to 26 securities by tracking the MVIS US Listed Semiconductor 25 Index. Intel occupies the top position with 9.8% of the assets. The product has managed assets worth $669.4 million and charges 35 bps in annual fees and expenses. It is heavily traded with volume of more than 6.3 million shares per day and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.
This ETF follows the PHLX SOX Semiconductor Sector Index and offers exposure to 30 U.S. firms with INTC taking the fourth spot with a 7.7% allocation. The fund has amassed $1.6 billion in its asset base and trades in volume of more than 744,000 shares a day. The product charges a fee of 48 bps a year from investors and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook (read: China's Likely Retaliation to US Tariffs & Its Impact on ETFs).
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 third firm accounting for 7.6% share. FTXL has accumulated $44.3 million in AUM and trades in average daily volume of 21,000 shares. It charges 0.60% in expense ratio and has a Zacks ETF Rank #1.
This fund tracks the Dynamic Semiconductor Intellidex Index, holding 30 securities in the basket. Intel occupies the fifth position and makes up for 4.8% share in the basket. PSI has a lower AUM of $307.2 million and sees a moderate average daily volume of about 77,000 shares. It charges a higher 63 bps in annual fees and sports a Zacks ETF Rank #1 with a High risk outlook.
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Semiconductor ETFs to Tap Intel's Dip Post Q2 Earnings
Intel (INTC - Free Report) , the world’s largest chipmaker, reported stronger-than-expected Q2 results after the market closed yesterday. The company surpassed estimates for both revenues and earnings and increased its full-year outlook. However, revenue growth at its fastest-growing data center business came below analysts’ expectation and took a toll on shares (read: What's in Store for Chip ETFs in Q2 Earnings?).
Intel Q2 Earnings in Focus
Earnings of $1.04 per share came in 5 cents above the Zacks Consensus Estimate and improved from the year-ago earnings of 58 cents. Revenues rose 15% year over year to $16.96 billion and were well ahead of the estimated $16.91 billion.
Revenues at data center business grew 27% to $5.5 billion, much lower than the analysts’ expectation of $5.61 billion. This somewhat disappointed investors as the segment has been the main driving force behind Intel's recent growth.
Intel expects revenues in the range of $17.6-$18.6 billion and earnings per share of $1.10-$1.20 cents for the third quarter. The mid-point is well above the current Zacks Consensus Estimate of $17.6 billion for revenues and $1.08 for earnings per share. For 2018, the company raised its revenue guidance by about $2 billion to $68.50-$70.50 billion and earnings per share by 30 cents to $3.94-$4.36. The Zacks Consensus Estimate is currently pegged at $68.63 billion for revenues and $4.03 for earnings per share.
Despite the solid results, shares of Intel dropped 5.7% in after-market hours on elevated volume. The beaten down price could be a solid entry point for investors, given that Intel has a top Zacks Rank #1 (Strong Buy) and a VGM Score of A. Additionally, the stock belongs to the top-ranked industry (top 4%).
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 - Free Report)
This fund provides exposure to 26 securities by tracking the MVIS US Listed Semiconductor 25 Index. Intel occupies the top position with 9.8% of the assets. The product has managed assets worth $669.4 million and charges 35 bps in annual fees and expenses. It is heavily traded with volume of more than 6.3 million shares per day and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.
iShares PHLX Semiconductor ETF (SOXX - Free Report)
This ETF follows the PHLX SOX Semiconductor Sector Index and offers exposure to 30 U.S. firms with INTC taking the fourth spot with a 7.7% allocation. The fund has amassed $1.6 billion in its asset base and trades in volume of more than 744,000 shares a day. The product charges a fee of 48 bps a year from investors and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook (read: China's Likely Retaliation to US Tariffs & Its Impact on ETFs).
First Trust Nasdaq Semiconductor ETF (FTXL - Free Report)
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 third firm accounting for 7.6% share. FTXL has accumulated $44.3 million in AUM and trades in average daily volume of 21,000 shares. It charges 0.60% in expense ratio and has a Zacks ETF Rank #1.
Invesco Dynamic Semiconductors ETF (PSI - Free Report)
This fund tracks the Dynamic Semiconductor Intellidex Index, holding 30 securities in the basket. Intel occupies the fifth position and makes up for 4.8% share in the basket. PSI has a lower AUM of $307.2 million and sees a moderate average daily volume of about 77,000 shares. It charges a higher 63 bps in annual fees and sports a Zacks ETF Rank #1 with a High risk outlook.
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Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>