Tech Time: Post-Earnings ETF Plays
For those that love alliteration, we proffer this line up "Tricks or Treats Following Tech Titan Thursday?" Seriously, that's what Thursday's after-hours session as a quartet of tech titans stepped into the earnings confessional.
Three of the four were greeted with open arms by investors with Google (NYSE: GOOG) playing the role of tech earnings misfit. As Benzinga reported, Google posted GAAP net income of $2.71 billion, or $8.22 per share, versus $2.54 billion, or $7.81 per share, in last year's fourth quarter. On a non-GAAP basis, which is comparable to analysts' consensus estimates, Google reported net income of $3.13 billion, or $9.50 per share, compared to $2.85 billion or $8.75 per share, in the year ago period. That missed Wall Street analysts' consensus EPS estimates of $10.49.
On the other hand, Dow components and old school tech titans International Business Machines (NYSE: IBM), Intel (Nasdaq: INTC) and Microsoft (NYSE: MSFT) all looked at least decent, and in the case of IBM, the forecast of 2012 earnings growth of 10% is downright impressive.
Can't decide which tech juggernaut to devote some capital to? Don't worry, there's an ETF for that and all of these funds could easily be in play today.
First Trust Dow Jones Internet Index Fund (NYSE: FDN) Just when the First Trust Dow Jones Internet Index Fund was starting to look racy, Google had to come along and possibly ruin the party. Google represents about 10% of FDN's weight so the ETF might see a small pullback following the search giant's glum earnings update. Amazon (Nasdaq: AMZN), Priceline (Nasdaq: PCLN) and dare we say Netflix (Nasdaq: NFLX) will play roles in FDN's near-term fortunes as well.
Technology Select Sector SPDR (NYSE: XLK) Entering the new 52-week high club on Thursday was the Technology Select Sector SPDR. That party could continue today and going forward as IBM, Microsoft and Intel combine for over 20% of XLK's weight, enough to overshadow Google's 6% allocation. Of course, Apple (Nasdaq: AAPL) looms large in XLK at over 15% of the fund's weight.
Global X Nasdaq 500 ETF (Nasdaq: QQQV) Yes, the Global Nasdaq 500 ETF. And yes, it's still relatively obscure. No, you won't IBM in this ETF, but you find that Microsoft, Google and Intel represent about 16% of the new ETF's weight. And yes, that was QQQV printing a new all-time high on Thursday (QQQV is less than two months old).
Rydex S&P Equal Weight Technology ETF (NYSE: RYT) We'd be doing you a disservice if we didn't tell you RYT doesn't feature an obscene weight to any one tech name. That's kind of the point of an equal-weight ETF. But before you go running into one of tech's usual ETF suspects like XLK, consider the fact that RYT is up 10% in the past three months while XLK is up "just" 6%.
Guggenheim Ocean Tomo Growth Index Fund (NYSE: OTR) While no one was looking, the Guggenheim Ocean Tomo Growth Index Fund gained over 7% to start 2012. OTR is home to 60 stocks from the Ocean Tomo Patent Index and it just so happens Microsoft and IBM account for over 23% of the obscure ETF's weight. OTR is also in superior technical form, so those waiting for a pullback to $28 might wait a while.
Guggenheim Ocean Tomo Patent ETF (NYSE: OTP) We kid you not, there is an ETF devoted to patent-rich companies. For some reason, Google isn't found here, but the other three tech giants mentioned throughout this piece account for over 14% of OTP's weight. Again, this is another obscure play with a strong chart. OTP could be good for another 8%-10% from current levels.
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