The social media giant Facebook Inc (NASDAQ:FB) has made an impressive comeback following its stellar second quarter results. In fact, FB shares have nearly doubled over the past three months, suggesting that the worst might be over for the company that had been seeing weak mobile advertising revenues since its IPO.
After all, mobile advertising revenues now account for 41% of the total revenue in the second quarter, up from 30% in the first quarter (read: 3 ETFs in Focus on Facebook’s Earnings Beat). This increasing advertising trend is expected to continue, as mobile revenue would soon exceed revenues from desktop advertisements, as per management.
This fast-growing mobile advertising market is boosting investors’ confidence in the company’s growth outlook. Additionally, Facebook recently launched a number of products, such as Twitter-like hashtags (#), Facebook Home and Instagram’s video application to attract advertisers.
These offerings have definitely spurred FB’s customer base, leading to a 51% spike in the monthly mobile active users during the second quarter. The lined-up products such as the Reader and television-like spot offerings for advertisers (reportedly for $2.5 million a day) can continue to fuel further growth in the months ahead.
Moreover, Citigroup has a bullish outlook on the company’s growth and the resulting upgrade of the stock to ‘Buy’ has spread optimism across the whole tech sector.
Facebook currently has a Zacks Rank #2 (Buy), suggesting that it will continue to outperform in the remainder of the year. Given the bullish outlook and the impressive run in FB share prices, we have highlighted three ETFs with heavy exposure to this social networking giant, any of which could be great ways to play this booming trend in the space:
Global X Social Media Index ETF (NASDAQ:SOCL)
This fund tracks the Solactive Social Media Index, holding 27 securities in the basket. Of these firms, FB takes the top spot, making up roughly 13.01% of assets. In terms of country exposure, U.S. firms take half of the portfolio, closely followed by China (28%) and Japan (13%).
The fund debuted a year and a half ago in the social media space and has amassed $66.7 million in its asset base. The ETF charges 0.65% in fees and expenses and sees light volumes on most days.
The ETF is up 49.1% year-to-date and increased 25.3% in the trailing three-month period. The fund currently has a Zacks ETF Rank of 3 or ‘Hold’ rating with ‘High’ risk outlook.