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Google’s parent company, Alphabet (GOOGL - Free Report) reported Q3 earnings after the end of trading session on Oct 25. The company topped the bottom line estimate but missed on the top line. Google reported earnings per share of $13.06, beating the Zacks Consensus Estimate by $2.52. It increased from year-over-year earnings by $3.49. About $1.38 billion was added to the firm’s income from security gains, a steady source of inflow from the past several quarters (see: all the Technology ETFs here).
However, it missed the revenue estimate by 0.58%, with Q3 revenues reported at $27.16 billion but nearly 22% above year-ago quarter revenues. Ad revenues grew 29% in the quarter while paid Clicks were up 62%. These gains were offset by worse-than-expected Cost per Click (down 28%) (Read: Microsoft Up on Solid Q1 Results: Top-Ranked ETFs in Focus).
The earnings report came several hours post a New York Times article which suspected Google paid executives millions of dollars after they were accused of sexual harassment. CEO, Sundar Pichai, said the company was "dead serious" about a safe workplace pointed toward the fact that 48 employees were fired from the company for harassment in the past two years without exit packages (read: Further Selloffs Ahead? ETF Strategies to Follow).
Shares fell by nearly 1.8% on close of the trading session (Oct 26). Alphabet has a VGM Score of C and carries a Zacks ETF Rank #3 (Hold), which indicates that long-term investors could bet on the stock. It also belongs to a top-ranked Zacks Industry (top 43%).
While there are several ETF options available, we have highlighted five with the largest allocation to Alphabet:
Communication Services Select Sector SPDR Fund (XLC - Free Report)
This ETF has been newly debuted to track the new communication services sector of the S&P 500 Index and has accumulated $3.79 billion already. It comprises 26 securities with GOOGL occupying the third position at 11.24%. The fund charges 13 bps in fees per year and carries a Zacks ETF Rank #2(Buy) (read: Big Tech Sector Shake-Up Put These Stocks and ETFs in Focus).
The fund tracks the MSCI US Investable Market Telecommunication Services 25/50 Index. It comprises 79 holdings, with Alphabet occupying the top spot (10.65%). AUM is 1.33 billion and expense ratio is 0.10%. It carries a Zacks ETF Rank #2 with a Medium risk outlook.
The fund tracks the S&P Global Telecommunications Sector Index and comprises 66 holdings. Alphabet occupies the third spot with 9.77% weight. AUM is $270 million and expense ratio is 0.47%. It carries a Zacks ETF Rank #2 with a Medium risk outlook.
This fund invests in some of the largest global companies that derive most of their revenues from the Internet and e-commerce sectors that exhibit quality and growth potential by tracking the O’Shares Global Internet Giants Index. It comprises 67 stocks with Alphabet taking the second spot, accounting for 6.55% of the assets. AUM is $48.6 million and expense ratio is 0.48%.
This ETF tracks the Dow Jones US Technology Index, giving investors exposure to 152 technology stocks. Out of these, GOOGL occupies the fifth position in the basket with 6.02% of the assets. AUM of $4.1 billion and expense ratio is 0.43%.The fund has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
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Alphabet Reports Mixed Results: ETFs in Focus
Google’s parent company, Alphabet (GOOGL - Free Report) reported Q3 earnings after the end of trading session on Oct 25. The company topped the bottom line estimate but missed on the top line. Google reported earnings per share of $13.06, beating the Zacks Consensus Estimate by $2.52. It increased from year-over-year earnings by $3.49. About $1.38 billion was added to the firm’s income from security gains, a steady source of inflow from the past several quarters (see: all the Technology ETFs here).
However, it missed the revenue estimate by 0.58%, with Q3 revenues reported at $27.16 billion but nearly 22% above year-ago quarter revenues. Ad revenues grew 29% in the quarter while paid Clicks were up 62%. These gains were offset by worse-than-expected Cost per Click (down 28%) (Read: Microsoft Up on Solid Q1 Results: Top-Ranked ETFs in Focus).
The earnings report came several hours post a New York Times article which suspected Google paid executives millions of dollars after they were accused of sexual harassment. CEO, Sundar Pichai, said the company was "dead serious" about a safe workplace pointed toward the fact that 48 employees were fired from the company for harassment in the past two years without exit packages (read: Further Selloffs Ahead? ETF Strategies to Follow).
Shares fell by nearly 1.8% on close of the trading session (Oct 26). Alphabet has a VGM Score of C and carries a Zacks ETF Rank #3 (Hold), which indicates that long-term investors could bet on the stock. It also belongs to a top-ranked Zacks Industry (top 43%).
While there are several ETF options available, we have highlighted five with the largest allocation to Alphabet:
Communication Services Select Sector SPDR Fund (XLC - Free Report)
This ETF has been newly debuted to track the new communication services sector of the S&P 500 Index and has accumulated $3.79 billion already. It comprises 26 securities with GOOGL occupying the third position at 11.24%. The fund charges 13 bps in fees per year and carries a Zacks ETF Rank #2(Buy) (read: Big Tech Sector Shake-Up Put These Stocks and ETFs in Focus).
Vanguard Communication Services ETF (VOX - Free Report)
The fund tracks the MSCI US Investable Market Telecommunication Services 25/50 Index. It comprises 79 holdings, with Alphabet occupying the top spot (10.65%). AUM is 1.33 billion and expense ratio is 0.10%. It carries a Zacks ETF Rank #2 with a Medium risk outlook.
iShares Global Telecom ETF (IXP - Free Report)
The fund tracks the S&P Global Telecommunications Sector Index and comprises 66 holdings. Alphabet occupies the third spot with 9.77% weight. AUM is $270 million and expense ratio is 0.47%. It carries a Zacks ETF Rank #2 with a Medium risk outlook.
O’Shares Global Internet Giants ETF (OGIG - Free Report)
This fund invests in some of the largest global companies that derive most of their revenues from the Internet and e-commerce sectors that exhibit quality and growth potential by tracking the O’Shares Global Internet Giants Index. It comprises 67 stocks with Alphabet taking the second spot, accounting for 6.55% of the assets. AUM is $48.6 million and expense ratio is 0.48%.
iShares Dow Jones US Technology ETF (IYW - Free Report)
This ETF tracks the Dow Jones US Technology Index, giving investors exposure to 152 technology stocks. Out of these, GOOGL occupies the fifth position in the basket with 6.02% of the assets. AUM of $4.1 billion and expense ratio is 0.43%.The fund has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>