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5 Mutual Funds to Play Salesforce's Q2 Earnings Beat
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Salesforce.com Inc. (CRM - Free Report) posted favorable earnings results in its fiscal second quarter. The rapid adoption of the company’s cloud-based solutions led to better-than-expected results. Additionally, on the back of stellar second-quarter results, Salesforce raised its fiscal 2019 guidance and stated that it is on track to reach $23 billion in annual revenues by fiscal 2022.
Salesforce’s encouraging earnings results had a positive impact on the tech sector and boosted investor sentiment. Following the promising development, investing in technology mutual funds with a significant holding in the San Francisco-based company will be a prudent decision.
Q2 Earnings in Focus
Salesforce.comreported splendid second-quarter fiscal 2019 non-GAAP earnings of 71 cents per share, which comprehensively beat the Zacks Consensus Estimate of 47 cents. The figure increased more than twofold from the year-ago quarter figure of 33 cents. For fiscal 2019, non-GAAP earnings are expected in the range of $2.50–$2.52 per share.
Revenues of $3.28 billion increased 27% year over year and surpassed the Zacks Consensus Estimate of $3.23 billion. Revenues grew 27% at constant currency (cc). In fiscal 2019, revenues are projected between $13.125 billion and $13.175 billion, up 25% year over year, higher than the previous expectation of $13.075 billion and $13.125 billion. (Read More: Salesforce Beats on Q2 Earnings, Raises FY19 View)
Alphabet’s Rally Boosts Tech Sector
Total earningsfor the Tech sector are up 34.4% on 12.8% higher revenues, with 89.8% beating EPS estimates and 83.7% beating revenue estimates. Additionally, out of the 55 Computer - Softwarecompanies that reported earnings, 38 posted earnings beat and eight met expectations.
Additionally, the tech sector has jumped 18.2% year to date (YTD), becoming the second-best performing sector on the S&P 500. In fact, the tech sector’s performance is better than the S&P 500’s increase of 8.5%. Additionally, mutual funds related to this sector registered strong returns. According to Morningstar, technology mutual funds have returned 19.1% YTD.
Buy 5 Tech Mutual Funds
Here we have selected five mutual funds that have significant exposure to the tech sector and Alphabet as one of the top three holdings. Moreover, these funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
These funds also have encouraging one-year annualized returns and minimum initial investment is within $5000. Also, each of these funds has a low expense ratio.
Columbia Global Technology Growth A (CTCAX - Free Report) invests a huge part of its assets in common stocks, preferred stocks and securities that are convertible into common or preferred stocks. These equity securities are issued by technology companies that will benefit from technological advancements or improvements.
CTCAX carries an expense ratio of 1.31% compared with the category average of 1.41%. Moreover, CTCAX requires a minimal initial investment of $2,000. The fund has one-year annualized returns of 28.3%.
CTCAX has a Zacks Mutual Fund Rank #1. Further, as of the last filing, CTCAX held 1.64% of its assets invested in Salesforce.
Fidelity Select Software & IT Services Portfolio (FSCSX - Free Report) invests a big part of its assets in companies whose primary operations are related to software or information-based services. FSCSX primarily focuses on acquiring common stocks of both domestic and foreign companies.
FSCSX carries an expense ratio of 0.73%, compared with the category average of 1.38%. Moreover, FSCSX requires a minimal initial investment of $2,500. The fund has one-year annualized returns of 31.5%.
FSCSX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, FSCSX held 3.35% of its assets invested in Salesforce.
Invesco Technology A (ITYAX - Free Report) invests a bulk of its assets in equity securities of companies involved in technology-based industries. The fund primarily focuses on investing in common stocks of tech companies.
ITYAX carries an expense ratio of 1.27% compared with the category average of 1.38%. Moreover, ITYAX requires minimal initial investment of $1,000. The fund has one-year annualized returns of 20.5%.
ITYAX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, ITYAX held 2.12% of its assets invested in Salesforce.
MFS Technology A (MTCAX - Free Report) invests a majority of its assets in securities of companies that are involved in using and developing services, processes and products that will benefit from any technological improvement. MTCAX primarily invests in equity securities.
MTCAX carries an expense ratio of 1.24% compared with the category average of 1.38%. Moreover, MTCAX requires a minimal initial investment of $1,000. The fund has one-year annualized returns of 28.7%.
MTCAX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, MTCAX held 4.24% of its assets invested in Salesforce.
T. Rowe Price Science & Technology (PRSCX - Free Report) invests a huge portion of its assets in common stocks of companies that are likely to gain from any technological development. The fund invests both in domestic and foreign companies.
PRSCX carries an expense ratio of 0.80% compared with the category average of 1.38%. Moreover, PRSCX requires a minimal initial investment of $2,500. The fund has one-year annualized returns of 24.3%.
PRSCX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, PRSCX held 3.24% of its assets invested in Salesforce.
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5 Mutual Funds to Play Salesforce's Q2 Earnings Beat
Salesforce.com Inc. (CRM - Free Report) posted favorable earnings results in its fiscal second quarter. The rapid adoption of the company’s cloud-based solutions led to better-than-expected results. Additionally, on the back of stellar second-quarter results, Salesforce raised its fiscal 2019 guidance and stated that it is on track to reach $23 billion in annual revenues by fiscal 2022.
Salesforce’s encouraging earnings results had a positive impact on the tech sector and boosted investor sentiment. Following the promising development, investing in technology mutual funds with a significant holding in the San Francisco-based company will be a prudent decision.
Q2 Earnings in Focus
Salesforce.comreported splendid second-quarter fiscal 2019 non-GAAP earnings of 71 cents per share, which comprehensively beat the Zacks Consensus Estimate of 47 cents. The figure increased more than twofold from the year-ago quarter figure of 33 cents. For fiscal 2019, non-GAAP earnings are expected in the range of $2.50–$2.52 per share.
Revenues of $3.28 billion increased 27% year over year and surpassed the Zacks Consensus Estimate of $3.23 billion. Revenues grew 27% at constant currency (cc). In fiscal 2019, revenues are projected between $13.125 billion and $13.175 billion, up 25% year over year, higher than the previous expectation of $13.075 billion and $13.125 billion. (Read More: Salesforce Beats on Q2 Earnings, Raises FY19 View)
Alphabet’s Rally Boosts Tech Sector
Total earningsfor the Tech sector are up 34.4% on 12.8% higher revenues, with 89.8% beating EPS estimates and 83.7% beating revenue estimates. Additionally, out of the 55 Computer - Softwarecompanies that reported earnings, 38 posted earnings beat and eight met expectations.
Additionally, the tech sector has jumped 18.2% year to date (YTD), becoming the second-best performing sector on the S&P 500. In fact, the tech sector’s performance is better than the S&P 500’s increase of 8.5%. Additionally, mutual funds related to this sector registered strong returns. According to Morningstar, technology mutual funds have returned 19.1% YTD.
Buy 5 Tech Mutual Funds
Here we have selected five mutual funds that have significant exposure to the tech sector and Alphabet as one of the top three holdings. Moreover, these funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
These funds also have encouraging one-year annualized returns and minimum initial investment is within $5000. Also, each of these funds has a low expense ratio.
Columbia Global Technology Growth A (CTCAX - Free Report) invests a huge part of its assets in common stocks, preferred stocks and securities that are convertible into common or preferred stocks. These equity securities are issued by technology companies that will benefit from technological advancements or improvements.
CTCAX carries an expense ratio of 1.31% compared with the category average of 1.41%. Moreover, CTCAX requires a minimal initial investment of $2,000. The fund has one-year annualized returns of 28.3%.
CTCAX has a Zacks Mutual Fund Rank #1. Further, as of the last filing, CTCAX held 1.64% of its assets invested in Salesforce.
Fidelity Select Software & IT Services Portfolio (FSCSX - Free Report) invests a big part of its assets in companies whose primary operations are related to software or information-based services. FSCSX primarily focuses on acquiring common stocks of both domestic and foreign companies.
FSCSX carries an expense ratio of 0.73%, compared with the category average of 1.38%. Moreover, FSCSX requires a minimal initial investment of $2,500. The fund has one-year annualized returns of 31.5%.
FSCSX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, FSCSX held 3.35% of its assets invested in Salesforce.
Invesco Technology A (ITYAX - Free Report) invests a bulk of its assets in equity securities of companies involved in technology-based industries. The fund primarily focuses on investing in common stocks of tech companies.
ITYAX carries an expense ratio of 1.27% compared with the category average of 1.38%. Moreover, ITYAX requires minimal initial investment of $1,000. The fund has one-year annualized returns of 20.5%.
ITYAX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, ITYAX held 2.12% of its assets invested in Salesforce.
MFS Technology A (MTCAX - Free Report) invests a majority of its assets in securities of companies that are involved in using and developing services, processes and products that will benefit from any technological improvement. MTCAX primarily invests in equity securities.
MTCAX carries an expense ratio of 1.24% compared with the category average of 1.38%. Moreover, MTCAX requires a minimal initial investment of $1,000. The fund has one-year annualized returns of 28.7%.
MTCAX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, MTCAX held 4.24% of its assets invested in Salesforce.
T. Rowe Price Science & Technology (PRSCX - Free Report) invests a huge portion of its assets in common stocks of companies that are likely to gain from any technological development. The fund invests both in domestic and foreign companies.
PRSCX carries an expense ratio of 0.80% compared with the category average of 1.38%. Moreover, PRSCX requires a minimal initial investment of $2,500. The fund has one-year annualized returns of 24.3%.
PRSCX has a Zacks Mutual Fund Rank #2. Further, as of the last filing, PRSCX held 3.24% of its assets invested in Salesforce.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>