Tag Archives: sbio

5 ETF Winners From Q3 Earnings Season

The Q3 2015 earnings picture appears weak especially with companies struggling to beat even low top-line estimates and declining fourth-quarter estimates. Total earnings for 90.3% of the S&P 500 companies that have reported so far are down 2.5% on an annual basis with a beat ratio of 68.3% while revenues decreased 4.6% with a beat ratio of 39.8%. In fact, the revenue beat ratio is the lowest relative to the recent quarters. Nevertheless, the technology sector bucked the revenue weakness and came up with better-than-expected results not only relative to pre-season expectations but also relative to the sector’s performance in the past quarters. Revenue surprise for the tech sector is 57.7%, just behind 58.3% for the medical sector. In terms of earnings surprises, transportation, conglomerates and medical are leading with impressive ratios of 85.7%, 83.3% and 81.3%, respectively. When it comes to stronger earnings growth rates, autos and transportation are the largest contributors with 30.7% and 22.5%, respectively. The other two sectors – medical and retail – also recorded double-digit earnings growth in Q3. With respect to revenues, retail has been trending up so far with growth of 18.4%, though results from about half of the retailers are still awaiting. Considering all the key metrics, several equity ETFs have impressed with their performances and have generated handsome returns over the trailing one month. While there are winners in many corners of the space, below are five ETFs that buoyed up on robust earnings results and crushed the broad market fund (NYSEARCA: SPY ) in the same period: ALPS Medical Breakthroughs ETF (NYSEARCA: SBIO ) – Up 11.4% This fund targets companies with one or more drugs in Phase II or Phase III FDA clinical trials by tracking the Poliwogg Medical Breakthroughs Index. It provides a well spread out exposure to 81 stocks in its basket with none holding more than 4.92% share. SBIO is a small cap centric fund, having amassed $160.9 million in its asset base. The product charges 50 bps in fees per year from investors and trades in average daily volume of around 151,000 shares. It has a Zacks ETF Rank of 2 or ‘Buy’ rating. PowerShares Nasdaq Internet Portfolio (NASDAQ: PNQI ) – Up 11.3% This fund targets the Internet corner of the broad technology space by tracking the Nasdaq Internet Index and charges 60 bps in fees per year. With AUM of $223.2 million, it holds a basket of 94 securities with concentration on the top five holdings at around 40.9% share. Large caps account for 70% share while the rest are evenly split between mid and small caps. The fund trades in a light volume of around 19,500 shares a day. In terms of industrial exposure, Internet software and services makes up for 57% share, followed by Internet retail (38.1%). PNQI has a Zacks ETF Rank of 2 with a High risk outlook. U.S. Global Jets ETF (NYSEARCA: JETS ) – Up 11.03% This fund provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. In total, the product holds 33 securities with double-digit allocation going to Southwest Airlines (NYSE: LUV ), American Airlines (NASDAQ: AAL ), Delta Air Lines (NYSE: DAL ), and United Continental (NYSE: UAL ). Other firms hold less than 4.1% share. The ETF has a certain tilt toward large cap stocks at 62% while small and mid caps account for 24% and 14% share, respectively, in the basket. The fund has gathered $49.4 million in its asset base while sees moderate trading volume of nearly 63,000 shares a day. It charges investors 60 bps in annual fees. iShares Dow Jones US Broker-Dealers ETF (NYSEARCA: IAI ) – Up 10.8% This fund offers exposure to the U.S. investment banks, discount brokerages, and stock exchange firms and tracks the Dow Jones U.S. Select Investment Services Index. The product currently holds 24 securities with largest allocation going to Goldman Sachs (NYSE: GS ) and Morgan Stanley (NYSE: MS ). The ETF has a nice mix of all cap securities with 52% going to large caps, 27% to small caps, and the rest to mid caps. The fund has accumulated $320.6 million in AUM and trades in moderate volume of nearly 64,000 shares a day. The product charges 43 bps in fees per year from investors and has a Zacks ETF Rank of 3 or ‘Hold’ rating. SPDR S&P Semiconductor ETF (NYSEARCA: XSD ) – Up 10.2% This fund targets the semiconductor corner of the broad technology space. It tracks the S&P Semiconductor Select Industry Index, holding 48 stocks in its portfolio. It is widely spread across securities as none of these allocates more than 3.86% of the assets. The product has a definite tilt toward small cap stocks at 60% while the rest is evenly split between the other two market cap levels. The fund is less popular in the semiconductor space with AUM of $155.5 million and average daily volume of about 160,000 shares. It charges 35 bps in fees per year and has a Zacks ETF Rank of 3. Original Post

Biotech ETFs Looking Attractive After Sell-Off

The biotech sector has long been the investors’ darling and the stocks saw an enormous run from late 2011 till this past summer, rising 340%. But the recent global market rout took away the sheen away from the sector, which faced a double whammy when Democratic Presidential candidate Hillary Clinton tweeted on drug price limits and increased regulatory scrutiny. The tweet led to a brutal seven-day sell-off, sending the Nasdaq Biotechnology index into a deep bear territory with a decline of more than 25% from its July highs. With this, the index wiped out all of its gain made this year. While investors may want to consider staying on the sidelines for the time being given the bearish trend, risk tolerant long-term investors could consider this slump a buying opportunity, should they have the patience for extreme volatility. Reasons to Buy Despite the current slide, the outlook for the sector is quite promising. This is especially true as the biotech sector is still clearly outpacing the broad market index from the year-to-date look. In fact, the sector enjoyed a strong rally over the past five years, gaining nearly 250% versus the gain of 64.8% for the S&P 500 index. This trend is likely to continue thanks to promising drug launches, cost-cutting efforts, an aging population, ever-increasing demand for new drugs, ever-increasing healthcare spending, a merger & acquisition frenzy, expansion into emerging markets and the Affordable Care Act or Obamacare. Additionally, biotech stocks provide a defensive tilt to the portfolio amid political or economic turmoil. Further, most of the stocks have sold off sharply, making their valuations immense attractive at the current levels (read: The 3 Key Factors in Biotech ETF Investing ). Given the promising long-term trends and the sector’s high growth potential, biotech stocks are due for a rebound and will likely move higher this fall. While individual stock investing is certainly an option, a look at the top ranked biotech ETFs could be a lesser risky way to tap the same broad trends. Top ETF Choices We have found a number of ETFs that have the top Zacks ETF Rank of 2 or ‘Buy’ rating in the space and that are expected to outperform in the months to come. These have gained the most from the sector’s surge in yesterday’s trading session and thus have superior weighting methodologies, which could allow them to continue leading the biotech space higher (read: all the Top Ranked ETFs ). ALPS Medical Breakthroughs ETF (NYSEARCA: SBIO ) This fund targets companies with one or more drugs in Phase II or Phase III FDA clinical trials by tracking the Poliwogg Medical Breakthroughs Index. It is a small cap centric fund, having amassed $143.2 million in its asset base since its debut late last December. The product holds 82 stocks in its basket with a well-diversified portfolio as none of the security holds more than 4.89% of assets. The product charges 50 bps in fees per year from investors and trades in good average daily volume of around 143,000 shares. It gained 5.2% in yesterday’s trading session and nearly 7% in the year-to-date timeframe. iShares Nasdaq Biotechnology ETF (NASDAQ: IBB ) This fund provides exposure to 144 firms by tracking the Nasdaq Biotechnology Index and charging 48 bps in annual fees. With AUM of nearly $7.5 billion and average daily volume of about 2.1 million shares, this is the largest and the most popular ETF in the biotech space. The product is slightly concentrated on the top five firms, which makes up for at least 8% share each. Other firms hold less than 4.10% of total assets. IBB gained 4.8% in yesterday’s trading session and is down 4.6% in the year-to-date time frame. SPDR Biotech ETF (NYSEARCA: XBI ) With AUM of $2 billion and average daily volume of 4.2 million shares, XBI is extremely liquid and an easily traded fund. It provides equal weight exposure across of around 1% to 103 stocks by tracking the S&P Biotechnology Select Industry Index. This suggests that the product has no concentration issue and offers huge diversification benefits. The product has a definite tilt toward small cap securities, as mid and large caps account for around 10% each. It charges a relatively low fee of 35 bps a year for the exposure. The ETF added 3.7% yesterday and is down 3.1% so far this year. BioShares Biotechnology Products ETF (NASDAQ: BBP ) This ETF follows the LifeSci Biotechnology Products Index, which measures the performance of biotechnology companies with a primary product offering that has received the U.S. Food and Drug Administration approval. Holding 38 stocks, the product has moderate concentration across components with each holding less than 5.5% share. Small caps dominate with 60%, followed by 25% in large caps and the rest in mid caps. The product has accumulated AUM of about $21.7 million since its debut last December and charges 85 bps in fees per year. Volume is light trading under 27,000 shares a day. BBP rose 3.5% yesterday and has returned about 2% in the year-to-date timeframe. Link to the original post on Zacks.com