Social media giant
once again reported blockbuster results for Q4 on a big jump in its
mobile advertising business and the strongest revenue growth in two
years. The company surpassed our estimates on both top and bottom
lines for the third consecutive quarter, lending optimism to the
future growth story.
Earnings per share came in at 31 cents per share, strongly
outpacing the Zacks Consensus Estimate of 21 cents, and 82% above
the year-ago earnings. Revenues climbed 63% year over year to $2.59
billion and surpassed our estimate of $2.36 billion (read:
3 ETFs with the Most Facebook (FB) Exposure in
This robust performance was driven by a 76% year-over-year increase
in advertising revenues. Mobile advertising revenues
reached $1 billion for the first time in the company's history
and accounted for 53% of total revenue, up from 49% in prior
quarter and 23% in the year-ago quarter.
The company saw remarkable growth in both daily (22% to 757
million) and monthly active users (16% to 1.23 billion) in 2013.
Following the astounding earnings beat, shares of FB soared as much
as 12% to a new high of $60 in after-market hours trading, while
shares were trading around $62.20 in early Thursday trading on
heavy volume (read:
Ride the Facebook Surge with These ETFs
Though declining teen user growth remains a major concern,
Facebook's decision to allow teen users to make public posts is a
The company is still leading the social media market and its
services such as Messenger and Instagram are attracting users. In
addition, the new products such as Video ads and Reader are
expected to drive top-line growth, going forward.
The company continues to gain market share in the U.S. digital
advertising market, in particular the mobile advertisement segment,
which is a key growth catalyst. Facebook overtook Yahoo (
) and Microsoft (
) to become the second firm in the digital advertising market,
trailing Google (
), as per
Apart from these, FB recently made its entry into the S&P 500
benchmark, providing a big boost to the company's brand. Moreover,
Facebook currently has a Zacks Rank #2 (Buy) and a solid
Zacks Industry Rank
in the top 34%, suggesting that the bullish trend will definitely
continue in the near future (read:
Will Investors 'Like' these ETFs as Facebook Joins
ETFs to Buy
Based on impressive results and solid growth prospects, investors
could definitely focus on ETFs that have a larger allocation to
this social network giant and grab any opportunity from a surge in
the FB price. For those investors, we have highlighted three ETFs
below that are poised to move upward following FB Q4 results:
Global X Social Media Index ETF (
This ETF offers the only pure play in the social media space and
has amassed $131.7 million in its asset base. The ETF charges 0.65%
in fees and expenses and sees good volumes of more than 190,000
shares a day.
The product tracks the Solactive Social Media Index, holding 27
securities in the basket. Of these firms, Facebook takes the second
spot, making up roughly 10.46% of assets. In terms of country
exposure, U.S. firms take more than half the portfolio, closely
followed by China (25%) and Japan (8%).
The ETF is down nearly 5% year-to-date and currently has a Zacks
ETF Rank of 2 or 'Buy' rating with a 'High' risk outlook (read:
3 ETFs to Watch for Big Moves This Year
First Trust US IPO Index Fund (
This ETF provides exposure to the booming U.S. IPO market by
tracking the IPOX-100 U.S. Index. The fund has accumulated $382.7
million in AUM and charges 60 bps in fees a year. Volume is good as
it exchanges nearly 110,000 shares a day on average (read:
Can IPO ETFs Remain Hot in 2014?
In total, the fund holds 100 securities in its basket with FB at
the top with 10.11% allocation. The product is slight tilted toward
consumer discretionary at nearly 27% while information technology,
energy and healthcare round off the next three spots. FPX lost over
4% so far this year.
PowerShares Nasdaq Internet Portfolio (
This fund follows the Nasdaq Internet Index, giving investors
exposure to the broad Internet industry. The fund holds 80 stocks
in its basket with AUM of $315.9 million while charging 60 bps in
fees per year. The ETF trades in light volume of nearly 67,000
shares a day.
Facebook occupies the top position in the basket with 9% of assets.
In terms of industry exposure, the Internet mobile application
sector makes up for more than two-third share in the basket,
followed by Internet retail (30%). PNQI is down nearly 4.5%
year-to-date and has a Zacks ETF Rank of 1 or 'Strong Buy' with a
'High' risk outlook.
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FACEBOOK INC-A (FB): Free Stock Analysis Report
FT-IPOX 100 (FPX): ETF Research Reports
PWRSH-ND INTRNT (PNQI): ETF Research Reports
GLBL-X SOCL MDA (SOCL): ETF Research Reports
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