We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Industrial ETFs in Focus on Strong GE Q2 Performance
Read MoreHide Full Article
On Friday, General Electric (GE - Free Report) , the industrial conglomerate giant, reported better-than-expected second-quarter 2016 earnings. Revenues too beat our estimates. Earnings per share came in at 51 cents, surpassing the Zacks Consensus Estimate of 46 cents and rising 65% from the year-ago quarter.
Revenues rose 15% year over year to $33.5 billion and were well above the estimated $30.8 billion. Although organic revenue growth and total orders for the Industrial segment were disappointing, sustained restructuring initiatives with a re-focus on core operations enabled the company to report better-than-expected results (read: Oil Rally Likely to Continue: ETFs & Stocks to Watch).
For 2016, the company reaffirmed its earnings per share guidance of $1.45–$1.55. The Zacks Consensus Estimate of $1.51 is within the guided range. Organic revenue is expected to grow 2–4% while cash generation is estimated at $30–$32 billion. General Electric also intends to return $26 billion to its shareholders this year, including $8 billion in dividends and $18 billion in share repurchases.
Market Impact
In spite of strong Q2 results, shares of GE slipped 1.6% in Friday’s trading session on concerns over organic growth. The industrial ETFs having double-digit allocation to this industrial conglomerate giant are in focus for the days ahead (see: all the Industrials ETFs here).
This ETF was launched in May 2016.It has accumulated AUM of $2.6 million and trades in paltry average daily volume of less than 1,000 shares. It follows the MSCI USA Industrials Diversified Multiple-Factor Capped Index and charges 35 bps in fees per year. Holding a small basket of 39 securities, GE takes the top spot with 14.3% allocation. Form a sector look, capital goods occupies the top position at 68.1% followed by transportation (21%).
This fund tracks the MSCI USA IMI Industrials Index, holding 335 stocks in its basket. General Electric takes the top spot at 12.9% share with the aerospace and defense industry making up for almost one-fourth of the portfolio, followed by industrial conglomerates at 18.8%. The product has amassed $161.4 million in its asset base while it trades in moderate volume of nearly 81,000 shares a day on average. It is one of the low-cost choices in the space charging 8 bps in annual fees from investors. The fund has a Zacks ETF Rank of 3 or ‘Hold’ rating with a Medium risk outlook (read: Fidelity Slashes Fees for 11 Sector ETFs).
This is the largest and most popular ETF in the space with AUM of $7.3 billion and average daily volume of 12.6 million shares. It follows the Industrial Select Sector Index and charges 14 bps in fees per year. Holding a small basket of 68 securities, GE takes the top spot with 11.3% allocation. Form a sector look, aerospace and defense occupies the top position at 26.7% followed by industrial conglomerates (17.8%) and machinery (13.7%). The fund has a Zacks ETF Rank of 4 or ‘Sell’ rating with a Medium risk outlook.
This fund follows the MSCI US IMI Industrials 25/50 index and holds about 345 securities in its basket. Of these firms, GE occupies the top position with 12.5% allocation. Here again, aerospace and defense takes the top spot at 22.7% followed by industrial conglomerates at 20.7%. The fund manages $2.3 billion in its asset base and charges 10 bps in annual fees. Volume is moderate as it exchanges 111,000 shares a day on average. The fund has a Zacks ETF Rank of 3 with a Medium risk outlook.
This product provides exposure to 213 industrial stocks by tracking the Dow Jones U.S. Industrials Index. It is heavily concentrated in GE – the top firm – with 11.2% of assets while others make up for less than 4.2% share. Further, the ETF is tilted toward capital goods companies at 58.1% while software & services and transportation round off the next two spots with double-digit exposure. The fund has an AUM of $809.4 million and average daily volume of 93,000 shares. Expense ratio came in at 0.45%. The fund has a Zacks ETF Rank of 3 with a Medium risk outlook.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Industrial ETFs in Focus on Strong GE Q2 Performance
On Friday, General Electric (GE - Free Report) , the industrial conglomerate giant, reported better-than-expected second-quarter 2016 earnings. Revenues too beat our estimates. Earnings per share came in at 51 cents, surpassing the Zacks Consensus Estimate of 46 cents and rising 65% from the year-ago quarter.
Revenues rose 15% year over year to $33.5 billion and were well above the estimated $30.8 billion. Although organic revenue growth and total orders for the Industrial segment were disappointing, sustained restructuring initiatives with a re-focus on core operations enabled the company to report better-than-expected results (read: Oil Rally Likely to Continue: ETFs & Stocks to Watch).
For 2016, the company reaffirmed its earnings per share guidance of $1.45–$1.55. The Zacks Consensus Estimate of $1.51 is within the guided range. Organic revenue is expected to grow 2–4% while cash generation is estimated at $30–$32 billion. General Electric also intends to return $26 billion to its shareholders this year, including $8 billion in dividends and $18 billion in share repurchases.
Market Impact
In spite of strong Q2 results, shares of GE slipped 1.6% in Friday’s trading session on concerns over organic growth. The industrial ETFs having double-digit allocation to this industrial conglomerate giant are in focus for the days ahead (see: all the Industrials ETFs here).
iShares Edge MSCI Multifactor Industrials ETF (INDF - Free Report)
This ETF was launched in May 2016.It has accumulated AUM of $2.6 million and trades in paltry average daily volume of less than 1,000 shares. It follows the MSCI USA Industrials Diversified Multiple-Factor Capped Index and charges 35 bps in fees per year. Holding a small basket of 39 securities, GE takes the top spot with 14.3% allocation. Form a sector look, capital goods occupies the top position at 68.1% followed by transportation (21%).
Fidelity MSCI Industrials Index ETF (FIDU - Free Report)
This fund tracks the MSCI USA IMI Industrials Index, holding 335 stocks in its basket. General Electric takes the top spot at 12.9% share with the aerospace and defense industry making up for almost one-fourth of the portfolio, followed by industrial conglomerates at 18.8%. The product has amassed $161.4 million in its asset base while it trades in moderate volume of nearly 81,000 shares a day on average. It is one of the low-cost choices in the space charging 8 bps in annual fees from investors. The fund has a Zacks ETF Rank of 3 or ‘Hold’ rating with a Medium risk outlook (read: Fidelity Slashes Fees for 11 Sector ETFs).
Industrial Select Sector SPDR Fund (XLI - Free Report)
This is the largest and most popular ETF in the space with AUM of $7.3 billion and average daily volume of 12.6 million shares. It follows the Industrial Select Sector Index and charges 14 bps in fees per year. Holding a small basket of 68 securities, GE takes the top spot with 11.3% allocation. Form a sector look, aerospace and defense occupies the top position at 26.7% followed by industrial conglomerates (17.8%) and machinery (13.7%). The fund has a Zacks ETF Rank of 4 or ‘Sell’ rating with a Medium risk outlook.
Vanguard Industrials ETF (VIS - Free Report)
This fund follows the MSCI US IMI Industrials 25/50 index and holds about 345 securities in its basket. Of these firms, GE occupies the top position with 12.5% allocation. Here again, aerospace and defense takes the top spot at 22.7% followed by industrial conglomerates at 20.7%. The fund manages $2.3 billion in its asset base and charges 10 bps in annual fees. Volume is moderate as it exchanges 111,000 shares a day on average. The fund has a Zacks ETF Rank of 3 with a Medium risk outlook.
iShares U.S. Industrials ETF (IYJ - Free Report)
This product provides exposure to 213 industrial stocks by tracking the Dow Jones U.S. Industrials Index. It is heavily concentrated in GE – the top firm – with 11.2% of assets while others make up for less than 4.2% share. Further, the ETF is tilted toward capital goods companies at 58.1% while software & services and transportation round off the next two spots with double-digit exposure. The fund has an AUM of $809.4 million and average daily volume of 93,000 shares. Expense ratio came in at 0.45%. The fund has a Zacks ETF Rank of 3 with a Medium risk outlook.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>