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David Dierking

ETF To Watch This Week: VanEck Vectors Semiconductor ETF

Looking for an ETF to watch out for this week? Keep an eye on the VanEck Vectors Semiconductor ETF (SMH).

This fund has been on a tear lately returning more than 64% over the past 12 months and 6% year-to-date. Earnings have been strong for the major semiconductor players and with two more big names set to report this week, the fund could be primed for more gains.

Let’s look at who’s already reported…

  • Intel (INTC) - The world’s biggest chipmaker beat on both the top and bottom lines in Q4. 2017 guidance was mixed - they lifted Q1 expectations but were more subdued on full year guidance.
  • Qualcomm (QCOM) - Qualcomm was the notable exception in the semiconductor group. Revenues missed and 2017 guidance was lowered. The lawsuit from Apple could spell trouble but I’d expect the company will fight it and it will eventually be settled. The stock trades at around 12 times forward earnings and has a nearly 4% dividend yield. The stock is up nearly 4% in the last two trading days.
  • Texas Instruments (TXN) - Texas Instruments also beat on the top and bottom lines and increased guidance for Q1.
  • NVIDIA (NVDA) - The video game chip maker’s stock has quadrupled over the past 12 months and followed up the move with a blowout Q4. The stock has taken a bit of a breather lately but that doesn’t take away from the company’s strong performance.

Reporting this week…

  • Applied Materials (AMAT) - The company reports after the market close on Wednesday. Cowen and Company just raised their price target on the stock from $33 to $40 heading into earnings and expects a strong beat on Wednesday.
  • Analog Devices (ADI) - Analog Devices will report Wednesday morning before the open. The company is expected to see growth across most of its businesses including auto, industrial and networking. The stock was recently named a top sector pick for 2017 by RBC.

Applied Materials and Analog Devices account for nearly 10% of the fund and could help boost the ETF this week with strong results.

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