Tag Archive | IYW

Four ETFs Driven By Apple and IBM’s Stellar Performance

Technology giants, Apple Inc. (AAPL) and International Business Machines (IBM) reported stellar quarterly earnings, smashing analyst expectations and shinning a ray of light on the technology sector and the exchange traded funds (ETFs) that track it.

Apple reported a fourth quarter increase in revenue to $26.7 billion, while boasting gross margins of 38.5 percent and net income of $6 billion, or $6.43 per share, beating Apple’s own forecasts of revenues of $23 billion and a gross margin of 36 percent.  Furthermore, these numbers crushed the $3.38 billion in net income that the Cupertino, California-based company boasted for the same period the previous year.  This jump in revenue was primarily driven by increased consumer spending and hence better than expected sales, which included 16.24 million iPhones, 7.33 million iPads, 4.13 million Macs and 19 million iPods.  Analysts were expecting sales in the realm of 15.5 million iPhones, 6.2 million iPads, 4.2 million Macs and 19 million iPods.  Read More…

Four ETFs To Play Microsoft’s Income Jump

Core products pushed revenues and net income up at Microsoft (MSFT) in the third quarter, further extending out the exceptional earnings season witnessed by the technology giants and giving further support to the Software HOLDERs ETF (SWH), the iShares Dow Jones US Technology (IYW) and the Technology Select Sector SPDR (XLK) and the Vanguard Information Technology ETF (VGT).

According to Microsoft’s Chief Financial Officer, demand for both Windows and Office products have thrived as businesses of all sizes increased technology purchases.  Furthermore, a new version of Microsoft’s flagship software, Windows 7, has sold more than 240 million licenses since its debut a year ago, making it the fastest selling operating system in the company’s history.   Another factor that aided in Microsoft’s performance was sales of Office 2010 which generated $5.13 billion in the quarter and, similar to Windows 7, sold 20 percent more units since the product’s launch that it did of the previous version of Office during the same time period.  Read More…

Four Small Cap ETFs Positioned To Grow

A sustainable economic recovery is likely to not be intact until financial institutions start lending and the credit markets loosen up, at which time small-cap exchange traded funds (ETFs), like the iShares Russell 2000 (IYW), the PowerShares Dynamic Small Cap (PJM), the Vanguard Small-Cap ETF (VBR) and the PowerShares Zacks Small Cap Portfolio Fund (PZJ) will reap the benefits.

Historically speaking, small caps have been the leader in sustainable economic recoveries.  One reason behind this is that small-cap companies, which generally have market values of under $2 billion, are more nimble and quicker to react to changes in market conditions and therefore are more likely to reap the growth benefits of increased lending than large-cap companies. Read More…

Three Quant ETFs Outperforming Their Respective Markets

Over the past few years, investors have been searching for investment tools that are “outside the box” to boost returns and add diversification, which has enabled quantitative exchange traded funds (ETFs) to grow at an exponential rate. 

In and of itself, the vast majority of ETF assets are still held in traditional beta funds which track well-known benchmarks like the S&P 500, the Russell 2000 or the MSCI Emerging Markets Index.  In fact, the SPDR S&P 500 (SPY), the iShares Russell 2000 Index (IYW) and the iShares MSCI Emerging Markets (EEM) continue to remain the most actively traded ETFs and make up a significant percentage of total assets that are invested in ETFs.

However, some ETF providers, like PowerShares, First Trust and Claymore have taken their offerings a step further by utilizing fundamental analysis and other quantitative methodologies to generate excess returns by identifying securities which are set to outperform the broader markets and experience above-average capital appreciation.  Read More…

3 Domestic Plays On Emerging Markets

According to projections from the International Monetary Fund, China, India and Brazil are expected to be the economic growth leaders of the year and it is possible to reap the benefits of this international growth domestically.

In addition to being cheaper, domestic stocks that are likely to benefit from international growth tend to be less volatile, have less risk and are more liquid than those of emerging markets. As these nations grow and develop, demand for energy, technology and industrials will likely surge. Read More…

Changes In Consumer Spending Boost Appeal in Technology

Despite an uptick in personal savings rates and lackluster results on overall consumer spending, electronics are causing consumers to reopen their wallets, further boosting the appeal of the technology sector.

According to a report released by the Commerce Department, outlays of televisions, computers, video and telephone equipment grew by 1.8% in the first six months of 2010, compared to the first half of pre-recession 2007.  In comparison, during the same time periods, sales of appliances decreased by 3.6% and that of furniture declined by a whopping 11%, indicating that consumer trends are shifting.  The report also indicated that overall consumer spending remained flat in June from the previous month and U.S. personal savings as a percentage of disposable income rose 6.4% from a month earlier.  Read More…

Three Tech ETFs To Play Apple And Microsoft

After reporting stellar quarterly financials, Apple (AAPL) and Microsoft (MSFT) remain attractive and for good reason.

In the fiscal third quarter, innovation king Apple, boasted revenues of $15.7 billion, up more than 61% from a year ago, yielding profits of $3.51 per share.  These results smoked Wall Street’s revenue expectations by nearly $1 billion and painted a rosy picture for the second-largest U.S. listed stock by market cap. 

One reason Apple is likely to continue to shine is that demand for the iPhone 4 remains insatiable despite reports of reception problems.  Additionally, the Cupertino, California-based technology firm recently updated its all-in-one iMac desktop computer line with new chips from Intel (INTC) and better graphics, which is expected to further boost appeal of iMacs.  In the most recent quarter, Apple sold 1 million desktop Mac units, an increase of 18% from the prior year, generating nearly $1.3 billion in revenue.  Currently, it is estimated that Apple is the fourth largest computer vendor in the U.S. with nearly 8.8% of the market share, giving the company the opportunity to grab more market share. Read More…

Three ETFs To Cash In On Increased Tech Spending

As technology giants report strong earnings and robust sales guidance, exchange traded funds (ETFs) which track the sector are poised for growth and could pose an opportunity.

As the U.S. economy starts to stabilize, business are expected to upgrade software and hardware, which were one of the first things to be postponed during the Great Recession as cost cutting efforts took precedent.  According to market research giant, IDC, sales of hardware are expected to rise by 6.4% and sales of software and technology are expected to jump 3% this year, to upgrade servers, workstations, networking gear and storage systems. 

To further boost appeal, increases in global personal computer sales will help bolster revenues.  Shipments of PCs are expected to rise 22% this year as many buyers bypassed Windows Vista and demand in emerging markets, fueled by an increase in personal wealth, is ballooning.  Read More…

Apple Likely to See Further Price Support

As Apple (AAPL) continues to reap the benefits from its revolutionizing consumer electronics with its stylish and easy to use products, the technology company has become the second largest U.S. company and is poised for additional short-term growth.

On Thursday, Apple closed at $253.35 per share, adding nearly 3.8% with a market capitalization of $239.3 billion.  This uptrend has pushed shares of the company nearly 10 times higher than they were 10 years ago.  This exponential growth has primarily been driven by the success of the iPod, iPhone, and iPad, all innovative products that have been hits with the consumer. 

As for the near future, the primary driver behind Apple’s expected growth lies in iPad sales internationally.  On Friday, Apple is expected to launch its touchscreen computer in Australia, Germany, France, Italy, Switzerland, Spain, the UK and Canada and is expected to be a tremendous hit.  The demand trend that was seen in the US, over 1 million iPads have been sold in the US since its April 3rd debut, is likely to continue in international markets.    Read More…

Opportunity Lies In Enterprise Computing

The technology sector as a whole is relatively broad and somewhat volatile, but the enterprise-tech sub-sector is expected to see prosperity convincing many of the industry’s big players to bet big on it.

As momentum of a broader economic expansion picks up, the labor market starts to stabilize, business investment increases, corporate technology budgets increase and activity in mergers and acquisitions picks up, demand for enterprise computing will likely continue to improve.

These economic trends, combined with easy access to debt, an appetite for acquisitions and plenty of cash, have pushed technology titans International Business Machines (IBM), Oracle (ORCL), SAP (SAP) and Cisco (CSCO), to restructure their overall business plans for the next few years to reap the benefits and stay bullish. 

IBM plans on bulking up its software business and placing less of an emphasis on hardware services.  CEO, Sam Palmisano, recently announced that the company expects to spend nearly $20 billion on software buyouts between 2011 and 2015.  IBM has already started to enter the software market through its acquisitions of 57 different software companies over the past 7 years.  This transitional focus is expected to enable the company to nearly double its profits by 2015. Read More…

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