The social media giant Facebook (
) once again reported blockbuster results for Q3 on continued
growth in mobile business. GAAP earnings came in at 17 cents per
share, strongly outpacing the Zacks Consensus Estimate of 13
cents per share and growing over twofold year over year.
Revenues climbed 60% year over year to $2.02 billion and
surpassed our estimated $1.895 billion. The robust performance
was driven by a 66% year-over-year increase in advertising
revenues, which accounted for 89% of the total revenue. Notably,
mobile advertising revenues accounted for 49% of total revenue,
up from 41% in Q2.
Facebook saw remarkable growth in both daily and monthly active
users (25% to 728 million and 18% to 1.19 billion, respectively)
in the third quarter (read:
Internet ETFs in Focus on Amazon Sales Beat
Any Reason to Worry?
Immediately following the astounding earnings beat, shares of FB
soared as much as 18% to a new high of more than $56 in
after-market hours trading yesterday. But the company's
conference call eroded all the gains and the stock was nearly
flat at the close.
This is because the management, in the conference call, said that
though overall teen user growth is stable, the younger teen usage
is declining. Additionally, the company is cautious about the
ramp-up of Newsfeed ads that could put pressure on its revenue
growth going forward.
This negative market reaction on the declining teen user growth
and stable Newsfeed ads should be rather 'short lived' as
Facebook is still leading the social media market and is stll
attracting new users.
Further, Facebook currently has a Zacks Rank #2 (Buy) and an
Outperform recommendation for the long term, suggesting that the
bullish trend can definitely continue in the near future.
Many ETFs with heavy exposure to the networking giant are
enjoying huge gains as Facebook has made an impressive comeback
after its second quarter results. In fact, FB share price more
than doubled over the past three months, suggesting that the
worst might be over for the company (read:
3 ETFs with the Most Facebook (FB) Exposure in
Below, we have highlighted three popular ETFs that have larger
allocation to FB and seem to be in focus. Investors should
closely monitor the movement in these funds and grab any
opportunity from a surge in the FB price:
Global X Social Media Index ETF (
This ETF offers the only pure play in the social media space. The
fund has so far amassed $97.4 million in its asset base. The ETF
charges 0.65% in fees and expenses and sees moderate volumes of
roughly 88,000 shares a day (read:
Social Media ETF in Focus As Twitter Plans
The product tracks the Solactive Social Media Index, holding 27
securities in the basket. Of these firms, Facebook takes the top
spot, making up roughly 13.04% of assets. In terms of country
exposure, U.S. firms take half of the portfolio, closely followed
by China (30%) and Japan (7%).
The ETF is up 52.78% year-to-date and increased 15.5% in the
trailing three-month period. The fund currently has a Zacks ETF
Rank of 2 or 'Buy' rating with a 'High' risk outlook.
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 $236.5
million in AUM and charges 60 bps in fees a year. Volume is
rather light as it exchanges nearly 57,000 shares in hand on
In total, the fund holds 100 securities in its basket. Here
again, Facebook is the top firm with 10.47% allocation. The
product has a nice mix of sectors, with the top four being
consumer discretionary, information technology, energy and
FPX gained over 9% in the past three months and is up about 39.3%
in the year-to-date time frame (read:
3 Niche ETFs Crushing the Market
PowerShares Nasdaq Internet Portfolio (
This fund follows the Nasdaq Internet Index, giving investors
exposure to the broad Internet industry. The fund holds over 80
stocks in its basket with AUM of $218.1 million while charging 60
bps in fees per year. The ETF trades in light volume of nearly
40,000 shares a day.
Facebook occupies the third position in the basket with 8.46% of
assets. In addition to information technology, the product also
offers exposure to consumer discretionary firms (31%) (read:
The Incredible Run for NFLX Puts These ETFs in
PNQI gained 14.27% over the trailing three months and nearly 51%
so far this year. The product 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
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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