Tag Archives: zacks-consensus

Petrobras Q1 Earnings Strength Put These ETFs In Focus

Brazilian state-run energy giant Petroleo Brasileiro S.A. or Petrobras (NYSE: PBR ) reported first-quarter 2015 results on May 15. The company reported first-quarter 2015 earnings per share of 14 cents (down from 17 cents in year-ago period) which breezed past Zacks Consensus Estimate of 8 cents. Its revenues of $25.97 billion, though down 24.7% year over year, surpassed the Zacks Consensus Estimate of $29.79 billion. Reduced cost of sales on lower oil and related product import costs (as noted by the management) can be considered the key to the success. This appears to be a huge achievement for Petrobras considering that the company has long been a laggard in Brazilian corporate backdrop. Prior to first-quarter 2015 earnings, the company’s average earnings surprise for the last four quarters was negative 20.24%. The company is the largest publicly-traded Latin American oil company and is leading Brazil’s oil and gas sector. The Brazilian government, with a high stake in the company, has a history of political intrusion in Petrobras’ issues. Moreover, a bribery scam involving high-profile officials at 2014-end added to its woes. The turnaround story began from Q4 of 2014 itself when the company posted an impressive 157.14% positive earnings surprise. The latest earnings report was only an icing on the cake. As per Financial Times, the drop in global fuel prices lent a hand to Petrobras which underperformed massively in a rising oil prices environment in early 2014. Per the Financial Times article, the company was compelled to import fuel and put it up for sale at discounted prices in Brazil in recent years to contain the country’s soaring inflation. Owing to the fuel subsidies, Petrobras lost about R$60bn during 2011 to 2014, per FT.com . Thanks to this optimism over the company, shares of Petrobras climbed over 8.3% in after marker hours on May 15 on elevated earnings. The stock was up over 2% during the trading session. Investors should note that the stock jumped nearly 39% so far this year versus about 3% gain for the S&P 500 index in the same time frame. PBR shares recouped most of the losses incurred last year. Investors seeking to make a play on this turnaround story might look to ETFs having a higher allocation to this oil giant. Below we have highlighted some of these that would be in focus in the coming days: iShares MSCI Brazil Index Fund (NYSEARCA: EWZ ) The fund has close to $3.4 billion in AUM and trades more than 16 million shares a day. The in-focus stock is the fourth largest holding of the Brazilian ETF with 5.2% exposure. The fund charges 62 bps in fees and is up 1.55% so far this year. However, the fund has a Zacks ETF Rank #4 (Sell). iShares Latin America 40 ETF (NYSEARCA: ILF ) This ETF gives exposure to big Latin American companies, though it is heavy on Brazil which has over half of the basket. The fund has amassed about $767.5 million in assets while it trades at volumes of over 500,000 shares a day. Petrobras takes the sixth position in the fund with about 4.6% focus. The fund charges 49 bps in fees. Investors should note that ILF is low on the energy sector as it takes just 10% of the portfolio. The fund is tilted toward the financial sector. The fund is up 3.8% so far this year. The fund has a Zacks ETF Rank #3 (Hold). Revenueshares ADR ETF (NYSEARCA: RTR ) This is an overlooked choice as it has accumulated assets of $27.6 million so far. The RevenueShares ADR Fund looks to track the S&P ADR Index. The fund invests about 3.8% in PBR which is its fifth holding. RTR costs investors 49 bps in fees. So far this year, the fund has returned over 10%. Original Post

ETFs To Watch On Mixed Mortgage REIT Q1 Earnings

The mortgage REIT sector started this year in the red as markets witnessed extreme volatility following concerns regarding global growth worries, weak first-quarter earnings results and a stronger dollar. Meanwhile, the continuous surge in yields weighed on the performance of the mortgage REITs. Moreover, investors were apprehending an interest rate hike right from the start of 2015. Additionally, a gradual decline in the unemployment rate increased the possibility of the hike, as it is speculated that the Fed will opt for raising the short-term rate in the later half of this year. A rising interest rate environment raises concerns about the performance of borrowed money which in turn would impact the dividend yield. These factors had an adverse effect on the first-quarter earnings results of the mortgage REITs. Mortgage REITs Earnings in Focus Among the major companies in this sector, American Capital Agency Corp. (NASDAQ: AGNC ) reported first-quarter 2015 net spread and dollar roll income of 70 cents per share (excluding estimated “catch-up” premium amortization), beating the Zacks Consensus Estimate by a cent. However, it was significantly below the previous quarter’s figure of 92 cents. Moreover, net interest income of $297 million came marginally below the Zacks Consensus Estimate of $298 million. Meanwhile the company reduced its monthly dividend rate to 20 cents from 22 cents paid earlier due to the prevailing volatile environment and a challenging interest rate scenario. Moreover, the company witnessed a decline in annualized economic return on common equity from 13.4% in the prior quarter to 7.1% in the first quarter. Another key player, Annaly Capital Management, Inc. (NYSE: NLY ) also posted mixed first-quarter results. The company reported first-quarter 2015 core earnings of 25 cents per share, missing the Zacks Consensus Estimate by 5 cents. However, net interest income of $389.8 million comfortably beat the Zacks Consensus Estimate of $347 million, but declined 26.6% year over year. Net interest margin for this quarter was 1.26% compared with 1.32% a year ago. Also, the company reported that net interest rate spread of 0.83% for the quarter decreased 7 basis points (bps) from the year-ago figure. Separately, the company said that its capital ratio (representing the ratio of stockholders’ equity to total assets) at the end of first-quarter 2015 was 14.1%, down 110 bps year over year. ETFs to Watch After releasing mixed first-quarter results on Apr. 27, shares of American Capital Agency declined nearly 4.4%. On the other hand, Annaly Capital Management’s shares rose a meager 0.5% following its earnings release on May 6. Given the lackluster first quarter, REIT ETFs with significant exposure to these mortgage REITs might be affected by the share price movements of these companies. Below we have highlighted two mREIT ETFs that are likely to remain in focus in the upcoming days. iShares Mortgage Real Estate Capped (NYSEARCA: REM ) REM tracks the FTSE NAREIT All Mortgage Capped Index, measuring the performance of the residential and commercial mREIT market in the U.S. The fund consists of 37 securities in its basket while it charges investors 48 basis points a year in fees. The product has a solid yield of nearly 12.9%. NLY and AGNC are the top two holdings of the fund occupying 14.30% and 10.99% share, respectively. This suggests a huge concentration of fund assets among the top 10 holdings, with nearly two-thirds of assets going to the top 10 securities alone. REM declined 1.8% this year and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Market Vectors Mortgage REIT Income ETF (NYSEARCA: MORT ) The ETF tracks the Market Vectors Global Mortgage REITs Index, measuring the performance of companies primarily engaged in the purchase or service of commercial or residential mortgage loans. The fund is relatively less popular with an asset base of $118.1 million and has a lower dividend yield of 7.8% as compared to REM. Like REM, the above-mentioned REITs occupy the top two spots here too, having a combined exposure of roughly 30%. MORT declined 1.3% in year-to-date frame and charges 41 basis points as expenses. Original post

Cisco Beats On Revenue, Guides Higher: Tech ETFs In Focus

One of the tech primes – Cisco Systems (NASDAQ: CSCO ) – reported third-quarter results after the closing bell on Wednesday. While the company met our earnings estimates, it beat revenue estimates for the sixth consecutive quarter, spreading some bullishness into the sector. This is especially true given that the company clearly emerged as a strong winner amid dollar strength and succeeded when its major rivals International Business Machines (NYSE: IBM ) and Oracle (NYSE: ORCL ) faltered on revenue growth by missing our estimates earlier this earnings season (read: IBM Revenues Fall Again in Q1: ETFs to Watch ). Further, Cisco guided higher for the ongoing quarter at its conference call. Nonetheless, the company’s shares fell about 0.7% at the close in aftermarket hours. Cisco’s Q2 Results in Focus Earnings per share came in line with the Zacks Consensus Estimate of 48 cents (accounting for stock-based compensation). Revenues rose 5% year over year to $12.14 billion and were well ahead of our estimate of $12.06 billion. The better-than-expected revenue performance was aided by solid demand for its high-end switches and routers. The world’s largest network equipment maker expects revenues to grow 1-2% year over year and earnings per share in the range of 55-57 cents for the ongoing quarter. Earnings guidance is above the Zacks Consensus Estimate of 51 cents. Cisco is the leading player in routers and switches business and the fastest-growing company in the $50 billion market for servers. Earlier in the month, the company announced Chuck Robbins as the new CEO, who will replace John Chambers on July 26. Market Impact Cisco’s revenue beat and solid guidance put tech ETFs having the largest allocation to the network giant in focus for the days ahead. Investors should closely monitor the movement in these funds and grab the opportunity when it arises (see: all the Technology ETFs here) . iShares North American Tech-Multimedia Networking ETF (NYSEARCA: IGN ) This ETF provides concentrated exposure to the domestic multimedia networking securities by tracking the S&P North American Technology Multimedia Networking Index. Holding 24 securities in its basket, Cisco takes the third spot with an 8.92% allocation. The product has a definite tilt toward mid caps, which comprise half of the portfolio. The fund has accumulated $148.1 million while it sees moderate volume of less than 50,000 shares a day. Expense ratio comes in at 0.47%. The fund has added 4.7% in the year-to-date time frame and has a Zacks ETF Rank of 1 or “Strong Buy” rating with a High risk outlook. First Trust NASDAQ Technology Dividend Index ETF (NASDAQ: TDIV ) This fund provides exposure to the dividend payers in the technology sector by tracking the NASDAQ Technology Dividend Index. The product has amassed about $712.4 million in its asset base and trades in good volume of more than 207,000 shares per day. The ETF charges 50 bps in annual fees. In total, the fund holds about 110 securities in its basket. Of these firms, CSCO occupies the third position, making up roughly 8.17% of the assets. In terms of industrial exposure, the fund allocates nearly one-fifth portion in semiconductor and semiconductor equipment, followed by software (16.5%), technology hardware, storage & peripherals (16.4%), and communications equipment (14.2%). The fund is up 1.4% so far this year (read: Chipmakers Q1 Earnings Fail to Fuel Semiconductor ETFs ). PowerShares Dynamic Networking Portfolio ETF (NYSEARCA: PXQ ) This fund follows the Dynamic Networking Intellidex Index, holding 30 securities in its basket. Out of these, Cisco is the fifth firm accounting for 4.94% share. From a sector look, communications equipment dominates the fund’s portfolio, holding less than half the assets, followed by 29% in software and programming. The fund is less popular and illiquid in the broad tech space with AUM of $27.6 million and average daily volume of about 3,000 shares. It charges 63 bps in annual fees and has returned 5.5% in the year-to-date time frame. PXQ has a Zacks ETF Rank of 3 or “Hold” rating with a High risk outlook. Original post