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ETFs to Buy on Oracle's Solid Q2 Earnings

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After the closing bell yesterday, software giant Oracle (ORCL - Free Report) reported stellar fiscal second-quarter 2022 results. The company beat the Zacks Consensus Estimate for both earnings and revenues on a rebound in IT spending. It also offered  solid revenue guidance for the ongoing quarter.

Following the results, Oracle shares jumped more than 10% in after-market trading. As a result, ETFs with the highest allocation to this software giant are expected to gain. These include iShares Expanded Tech-Software Sector ETF (IGV - Free Report) , Invesco BuyBack Achievers ETF (PKW - Free Report) , Invesco Dynamic Software ETF , First Trust NASDAQ Technology Dividend Index Fund (TDIV - Free Report) and First Trust Cloud Computing ETF (SKYY - Free Report) .

Oracle Earnings in Focus

Earnings per share came in at $1.21, beating the Zacks Consensus Estimate of $1.11 and improving 14% from the year-ago quarter. Revenues rose 6% year over year to $10.4 billion, above the estimated $10.2 billion. This fiscal second quarter was the best quarter of growth since 2018 (see: all the Technology ETFs here).

The solid results can be attributed to 22% growth of infrastructure and applications cloud businesses, which are approaching $11 billion in annualized revenues.

Revenues from the two strategic cloud applications businesses — Fusion and NetSuite Cloud ERP applications — grew 35% and 29%, respectively, during the quarter. Oracle Fusion is the world's biggest cloud ERP business while Oracle NetSuite is the world's second-biggest cloud ERP business.

Oracle offered an upbeat guidance for the ongoing quarter. It expects revenues to grow to $10.7-$10.9 billion and adjusted earnings in the range of $1.19-$1.23 per share. The Zacks Consensus Estimate for revenues and earnings per share are pegged at $42.23 billion and $4.65, respectively.  

Oracle carries a Zacks Rank #3 (Hold) and has a Growth Score of A. It belongs to a bottom-ranked Zacks Industry (top 46%).

ETFs in Focus

Let’s delve into each ETF below:

iShares Expanded Tech-Software Sector ETF (IGV - Free Report)

iShares Expanded Tech-Software Sector ETF provides exposure to software companies in the technology and communication services sectors by tracking the S&P North American Expanded Technology Software Index. The fund holds a basket of 118 securities with Oracle taking the fifth spot at 5.7% of the total assets (read: 5 Tech Stocks That Led the Nasdaq ETF Rally).

iShares Expanded Tech-Software Sector ETF is popular with AUM of $6.1 billion. Volume is good as it exchanges 1.2 million shares a day. The product charges 43 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

Invesco BuyBack Achievers ETF (PKW - Free Report)

Invesco BuyBack Achievers ETF follows the NASDAQ US BuyBack Achievers Index, which comprises U.S. securities issued by corporations that have led to a net reduction in shares outstanding of 5% or more in the trailing 12 months. It holds a basket of 103 stocks with Oracle taking the third position at 4.9% allocation.

Invesco BuyBack Achievers ETF has accumulated $1.5 billion in its asset base and trades in an average daily volume of 275,000 shares. It charges 64 bps in annual fees.

Invesco Dynamic Software ETF

Invesco Dynamic Software ETF offers exposure to the companies that are principally engaged in the research, design, production or distribution of products or processes that relate to software applications and systems and information-based services. It follows the Dynamic Software Intellidex Index, holding 31 securities in its basket. Out of these, Oracle is the eighth firm accounting for 4.6% share.

Invesco Dynamic Software ETF has amassed $420.9 million in its asset base and trades in an average daily volume of about 13,000 shares. The expense ratio came in at 0.56%. PSJ has a Zacks ETF Rank #3 (Hold) with a High risk outlook.

First Trust NASDAQ Technology Dividend Index Fund (TDIV - Free Report)

First Trust NASDAQ Technology Dividend Index Fund provides exposure to the dividend payers in the technology sector by tracking the Nasdaq Technology Dividend Index. It holds about 93 securities in its basket. Of these firms, ORCL occupies the eighth position, making up 3.9% of the assets

First Trust NASDAQ Technology Dividend Index Fund has amassed about $1.8 billion in its asset base and trades in a moderate volume of about 46,000 shares per day. The ETF charges 50 bps in annual fees.

First Trust Cloud Computing ETF (SKYY - Free Report)

First Trust Cloud Computing ETF provides exposure to companies involved in the cloud computing industry by tracking the ISE CTA Cloud Computing Index. Holding about 66 stocks in the basket, Oracle takes the eighth position at 3.6% (read: Here's Why You Need to Bet on Big Tech ETFs Right Now).

First Trust Cloud Computing ETF has been able to manage $6.3 billion in its asset base while seeing a good volume of about 292,000 shares a day. Its expense ratio is 0.60% and it has a Zacks ETF Rank #2 with a Medium risk outlook.

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