Market Overview

Priceline Powers Internet ETFs

Priceline Powers Internet ETFs

Shares of travel reservations provider Priceline Group Inc (NASDAQ: PCLN) were trading higher by 5.3 percent at time of writing after touching an all-time high earlier following the company's second-quarter earnings report.

To Recap

The company posted quarterly net income of $517 million, or $9.94 per share, compared to $576.5 million, or $10.89 per share, in the year-ago period. On an adjusted basis, the company's earnings came in at $12.45 per share.

Its revenue climbed to $2.28 billion from $2.12 billion. Analysts were expecting earnings of $11.98 per share on revenue of $2.27 billion. The average estimate among 60 Estimize users was for earnings of $12.41 per share and revenue of $2.30 billion.

On To ETFs...

Priceline's ascent to new highs is pushing a pair of Internet exchange traded funds higher as well. The PowerShares NASDAQ Internet Portfolio (NASDAQ: PNQI) and the First Trust Dow Jones Internet Index Fund (NYSE: FDN) are the ETFs with the largest Priceline weights and each is flirting with gains of 2 percent.

To this point in Wednesday's session, 24 ETFs have made all-time highs and FDN is one thanks in part to an almost 5.8 percent Priceline allocation. Priceline shows as FDN's third-largest holding, but when combining both classes of Google Inc (NASDAQ: GOOG) stock, Priceline is really the ETF's fourth-largest holding.

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FDN has surged 19.6 percent, more than doubling the returns of the Nasdaq Composite. Priceline has helped, but FDN's big advantages lie in large weights to, Inc. (NASDAQ: AMZN), Facebook Inc (NASDAQ: FB) and Netflix, Inc. (NASDAQ: NFLX). The ETF has weights of 10.6 percent, 10.1 percent and 5.3 percent to those stocks, all of which are the largest to those beloved Internet names among all ETFs.

The $231 million PowerShares NASDAQ Internet Portfolio also shows Priceline as its fourth-largest holding, but in the case of this ETF, Priceline commands a weight of almost 9 percent, the biggest weight to that stock among well-known ETFs.

PNQI has also more than doubled the Nasdaq Composite's returns this year, jumping 16.7 percent. The ETF has lagged FDN because the PowerShares offering sports a large weight to Twitter Inc (NYSE: TWTR) than its First Trust rival and a stake in Baidu (NASDAQ: BIDU), two stocks that have recently slumped. FDN does not own shares of Baidu.

In its favor is this: PNQI makes for cost-efficient access to a slew of high-priced stocks. Five of the ETF's top 10 holdings have triple- or quadruple-digit price tags. Amazon, Facebook, Google and Priceline combine for about 37 percent of PNQI's weight.

Posted-In: Long Ideas Sector ETFs Intraday Update Trading Ideas ETFs Best of Benzinga


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