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After the closing bell on Thursday, the online e-commerce behemoth Amazon (AMZN - Free Report) came up with a huge earnings beat when it reported Q4 earnings.
Earnings per share came in at $6.47, above the Zacks Consensus Estimate of $3.98 and higher than the year-ago earnings of $6.04. Revenues climbed 21% year over year to $87.4 billion and edged past the consensus estimate of $86 billion. In particular, revenues from the cloud computing business — Amazon Web Services — surged 34% year over year to $9.95 billion.
Amazon’s investments in one-day shipping and original Prime video content is paying off as its Prime membership program reached a record 150 million people (see: all the Consumer Discretionary ETFs here).
The company offered upbeat revenue guidance for the ongoing quarter. For the first quarter of 2020, the company expects revenues to grow 16-22% to $69-$73 billion. The high end of the range is much above the current Zacks Consensus Estimate of $71.34 billion, which indicates 19.5% growth.
Market Impact
The strong results pushed shares of AMZN higher as much as 13% in aftermarket hours on elevated volume, putting the online retailer back in the $1 trillion market capitalization club. The stock currently has a Zacks Rank #3 (Hold) and Growth Score of A, suggesting that Amazon is primed for growth in the future. However, Amazon belongs to a bottom-ranked industry (bottom 32%).
Given this, investors could tap Amazon in the form of ETFs with the highest allocation to this Internet giant. Below we have highlighted five of them:
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
This fund tracks the MSCI USA IMI Consumer Discretionary Index, holding 286 stocks in its basket. Of these, AMZN takes the top spot with 23.8% share. Internet & direct marketing retail makes up for the top sector with 29.4% share followed by specialty retail (22%), and hotels, restaurants & leisure (18.9%). The product has amassed $766.4 million in its asset base while trading in a good volume of around 78,000 shares a day on average. It charges 8 bps in annual fees from investors and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
This is the first ETF focused exclusively on retailers that principally sell online. It follows the ProShares Online Retail Index, holding 24 stocks in its basket. Amazon is the top firm accounting for about 24% of the portfolio. The product has amassed $27.9 million in its asset base while currently trading in a paltry volume of around 12,000 shares a day on average. It charges 58 bps in annual fees from investors (read: 5 ETFs to Ride on Higher Consumer Confidence).
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
This product offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. It is the largest and most-popular product in this space, with AUM of nearly $15.6 billion and average daily volume of around 3.6 million shares. Holding 64 securities in its basket, Amazon takes the top spot with 23.7% of assets. Internet & direct marketing retail dominates about 28.8% of the portfolio, while specialty retail, and hotels restaurants and leisure round off the next two spots with a double-digit allocation each. The fund charges 0.13% in expense ratio and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
This fund currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index and holds 297 stocks in its basket. Of these, Amazon occupies the top position with 22.8% allocation. VCR charges investors 10 bps in annual fees, while volume is moderate at nearly 62,000 shares a day. The product has managed about $3.1 billion in its asset base and carries a Zacks ETF Rank #2 with a Medium risk outlook.
This fund provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index. Of these, AMZN takes the top position in the basket with 20.7% share. The product has amassed $98.9 million in its asset base and charges 35 bps in annual fees. Volume is light as it exchanges nearly 12,000 shares per day. RTH has a Zacks ETF Rank #3 with a Medium risk outlook (read: ETFs to Tap on Amazon's Record Holiday Sales).
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Amazon Q4 Earnings Put These ETFs in Focus
After the closing bell on Thursday, the online e-commerce behemoth Amazon (AMZN - Free Report) came up with a huge earnings beat when it reported Q4 earnings.
Earnings per share came in at $6.47, above the Zacks Consensus Estimate of $3.98 and higher than the year-ago earnings of $6.04. Revenues climbed 21% year over year to $87.4 billion and edged past the consensus estimate of $86 billion. In particular, revenues from the cloud computing business — Amazon Web Services — surged 34% year over year to $9.95 billion.
Amazon’s investments in one-day shipping and original Prime video content is paying off as its Prime membership program reached a record 150 million people (see: all the Consumer Discretionary ETFs here).
The company offered upbeat revenue guidance for the ongoing quarter. For the first quarter of 2020, the company expects revenues to grow 16-22% to $69-$73 billion. The high end of the range is much above the current Zacks Consensus Estimate of $71.34 billion, which indicates 19.5% growth.
Market Impact
The strong results pushed shares of AMZN higher as much as 13% in aftermarket hours on elevated volume, putting the online retailer back in the $1 trillion market capitalization club. The stock currently has a Zacks Rank #3 (Hold) and Growth Score of A, suggesting that Amazon is primed for growth in the future. However, Amazon belongs to a bottom-ranked industry (bottom 32%).
Given this, investors could tap Amazon in the form of ETFs with the highest allocation to this Internet giant. Below we have highlighted five of them:
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
This fund tracks the MSCI USA IMI Consumer Discretionary Index, holding 286 stocks in its basket. Of these, AMZN takes the top spot with 23.8% share. Internet & direct marketing retail makes up for the top sector with 29.4% share followed by specialty retail (22%), and hotels, restaurants & leisure (18.9%). The product has amassed $766.4 million in its asset base while trading in a good volume of around 78,000 shares a day on average. It charges 8 bps in annual fees from investors and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
ProShares Online Retail ETF (ONLN - Free Report)
This is the first ETF focused exclusively on retailers that principally sell online. It follows the ProShares Online Retail Index, holding 24 stocks in its basket. Amazon is the top firm accounting for about 24% of the portfolio. The product has amassed $27.9 million in its asset base while currently trading in a paltry volume of around 12,000 shares a day on average. It charges 58 bps in annual fees from investors (read: 5 ETFs to Ride on Higher Consumer Confidence).
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
This product offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. It is the largest and most-popular product in this space, with AUM of nearly $15.6 billion and average daily volume of around 3.6 million shares. Holding 64 securities in its basket, Amazon takes the top spot with 23.7% of assets. Internet & direct marketing retail dominates about 28.8% of the portfolio, while specialty retail, and hotels restaurants and leisure round off the next two spots with a double-digit allocation each. The fund charges 0.13% in expense ratio and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Vanguard Consumer Discretionary ETF (VCR - Free Report)
This fund currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index and holds 297 stocks in its basket. Of these, Amazon occupies the top position with 22.8% allocation. VCR charges investors 10 bps in annual fees, while volume is moderate at nearly 62,000 shares a day. The product has managed about $3.1 billion in its asset base and carries a Zacks ETF Rank #2 with a Medium risk outlook.
VanEck Vectors Retail ETF (RTH - Free Report)
This fund provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index. Of these, AMZN takes the top position in the basket with 20.7% share. The product has amassed $98.9 million in its asset base and charges 35 bps in annual fees. Volume is light as it exchanges nearly 12,000 shares per day. RTH has a Zacks ETF Rank #3 with a Medium risk outlook (read: ETFs to Tap on Amazon's Record Holiday Sales).
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 >>