Breaking News
Black Friday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Walmart Beats On Earnings, Raises View: ETFs In Focus

By Zacks Investment ResearchStock MarketsNov 14, 2019 10:10PM ET
www.investing.com/analysis/walmart-beats-on-earnings-raises-view-etfs-in-focus-200485720
Walmart Beats On Earnings, Raises View: ETFs In Focus
By Zacks Investment Research   |  Nov 14, 2019 10:10PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Walmart (NYSE:WMT) spread optimism in the retail space by reporting robust third-quarter fiscal 2020 results. The mega retailer topped earnings estimates but fell shy of the consensus mark for revenues. Additionally, the company raised full-year forecast.

Earnings per share came in at $1.16, beating the Zacks Consensus Estimate by 7 cents. Also, the bottom line increased from the year-ago figure of $1.08. Revenues inched up 2.5% year over year to $128 billion but fell short of the estimated $129 billion. U.S. same-store sales grew 3.2% in the quarter. E-commerce sales jumped 41% driven by strong growth in online grocery (read: Time to Flock to E-commerce ETFs Ahead of Holiday Season?).

The brick-and-mortar retailer lifted its fiscal 2020 view. Including Flipkart, it now expects adjusted earnings per share to increase slightly, and to rise in the high single-digit percentage range, excluding it. Previously, WMT expected a slight decrease to slight increase in earnings per share including Flipkart, and an increase in the mid-to-high single digit range, excluding it.

Market Impact

Following the release, shares of WMT jumped as much as 3.6% on the day to hit new high of $125.38 but fell 0.3% at the end of the trading session. The stock also crushed its average daily volume figures as nearly 22.25 million shares moved hands compared with 5.3 million on average. WMT currently has a Zacks Rank #2 (Buy) and a VGM Score of A, suggesting strong upside in the coming months. However, it belongs to an unfavorable Zacks industry (placed at the bottom 38% of 250+ industries) (see: all Consumer Staples ETFs here).

Consequently, ETFs having the highest allocation to the world's largest brick-and-mortar retailer have been in focus following the results. Below, we have highlighted six of them:

VanEck Vectors Retail ETF (TSXV:RTH)

This fund provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index. Of these, WMT occupies the third position in the basket with 9.1% share. The product has amassed $86.1 million in its asset base and charges 35 basis points (bps) in annual fees. Volume is light as it exchanges nearly 9,000 shares per day. RTH gained 0.5% post WMT results and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

Consumer Staples Select Sector SPDR Fund XLP

This is the most popular consumer staples ETF with AUM of $13.1 billion and follows the Consumer Staples Select Sector Index. The fund charges 13 bps in fees per year from investors and trades in heavy volume of nearly 13.3 million shares a day. In total, the fund holds about 33 securities in its basket with WMT taking the fourth spot at 9.2%. From a sector perspective, beverages take the largest share at 25.1% while household products, food and staples retailing, and food products account for a double-digit allocation each. XLP shed 0.1% on the day and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: Tap Revenue Growth With These ETFs & Dump Earnings Recession).

Fidelity MSCI Consumer Staples Index ETF (LON:FSTA)

This fund tracks the MSCI USA IMI (LON:IMI) Consumer Staples Index, holding 89 stocks in its basket. Out of these, WMT takes the fourth spot with 8.6% share. The ETF is widely diversified across beverages, household products, food and staples retailing, food products, and tobacco. It has amassed $557.4 million in its asset base, while trading in moderate volume of around 135,000 shares a day on average. It charges 8 bps in annual fees from investors and lost 0.1% following WMT results. The product has a Zacks ETF Rank #1 with a Medium risk outlook.

Vanguard Consumer Staples ETF VDC

This fund manages a $5.3 billion asset base and has exposure to a basket of 89 consumer stocks by tracking the MSCI US Investable Market Consumer Staples 25/50 Index. It charges a fee of 10 bps per year and trades in a good volume of around 118,000 shares per day on average. Here, WMT occupies the fourth position in the basket with 8.1% allocation. The product is widely spread across household products, soft drinks, packaged foods & meat, hypermarkets & super centers, and tobacco that make up for a double-digit allocation each. The fund was down 0.1% on the day and has a Zacks ETF Rank #1 with a Medium risk outlook.

First Trust Nasdaq Retail ETF FTXD

The fund follows the Nasdaq US Smart Retail Index and holds 49 stocks in its basket. WMT takes the top spot with 7.8% of the assets. FTXD has accumulated $8.5 million in its asset base and has an expense ratio of 0.60%. The ETF has added 0.8% post WMT results and has a Zacks ETF Rank #3 (read: Is the Retail Picture Truly Gloomy? ETFs in Focus).

iShares Evolved U.S. Discretionary Spending ETF IEDI

This is an actively-managed ETF that employs data science techniques to identify companies with exposure to the discretionary spending sector. Holding 217 stocks in its basket, WMT occupies the third position with 6.7% share. The fund has accumulated $9.1 million in its asset base and charges 18 bps in fees per year. Volume is paltry as it exchanges 6,000 shares a day on average. IEDI gained 0.4% following WMT results.

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 >>



VanEck Vectors Retail ETF (RTH): ETF Research Reports

First Trust NASDAQ Retail ETF (FTXD): ETF Research Reports

Vanguard Consumer Staples ETF (VDC): ETF Research Reports

Consumer Staples Select Sector SPDR Fund (XLP): ETF Research Reports

Fidelity MSCI Consumer Staples Index ETF (FSTA): ETF Research Reports

Walmart Inc. (WMT): Free Stock Analysis Report

iShares Evolved U.S. Discretionary Spending ETF (IEDI): ETF Research Reports

Original post

Zacks Investment Research

Walmart Beats On Earnings, Raises View: ETFs In Focus
 

Related Articles

Anna Coulling
Where Next For Tesla? By Anna Coulling - Nov 26, 2021 1

In the pause point of celebrating Thanksgiving and a four-day weekend, I thought it would be a good time to review some stocks and have decided on the daily chart for Tesla...

Walmart Beats On Earnings, Raises View: ETFs In Focus

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email