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Tesla Motors (TSLA - Free Report) has become an investors’ darling and is riding high setting new milestones. This is especially true as the electric carmaker has rallied nearly double digits this week to hit a record high of $304.81.
With this surge, Tesla has become the No. 2 car company in the U.S. with a market capitalization of $49.5 billion, easily surpassing Ford Motor Co. (F - Free Report) having a market cap of $44.4 billion. The race to the big three carmakers in America auto industry has now become fierce with Tesla just $1.8 billion behind General Motors (GM - Free Report) , which saw shares plunging post disappointing sales in March. General Motors is currently worth $51.3 billion (read: Auto ETF, Stocks Tank on Dismal March Sales: Time to Buy?).
Tesla’s impressive performance is backed by better-than-expected first-quarter production and delivery numbers. Tesla delivered a record 25,000 vehicles (13,450 Model S and 11,550 Model X), up 69% year over year, during the first quarter. It produced a record 25,418 vehicles and had 4,650 vehicles in transit at the end of the quarter.
The automaker is on track to deliver 47,000–50,000 vehicles in the first half of 2017. Additionally, the company expects to produce 5,000 cars per week later in the year once production of the new Model 3 begins in July.
As Tesla is all about electric cars, its production and delivery plans matter most to investors. Currently, Tesla has a Zacks Rank #3 (Hold) with a VGM Style Score of F but has a poor Zacks Industry Rank (in the bottom 11%). Its earnings and revenues are expected to grow 48.17% and 58.55%, respectively, this year versus the industry averages of 6.30% and 1.55%. Further, its long-term growth rate is also inspiring at 30%, double the industry average growth of 14.20%. All these suggest smooth trading for the carmaker in the coming months (read: Electric Cars Find Favor with City Administrators: ETFs in Focus).
ETFs to Buy
Given the recent optimism, investors should definitely ride the upcoming surge in a basket form. Below are four ETFs with the highest allocation to this tech titan that could make for a compelling play at least in the near term.
Market Vectors Global Alternative Energy ETF
This ETF tracks the Ardour Global Index Extra Liquid, focusing on global companies that are primarily engaged in the business of alternative energy. The fund holds about 31 stocks in its basket with AUM of $68.2 million while charging 62 bps in fees per year. Average daily volume is paltry at about 6,000 shares. Tesla Motors occupies the top position in the basket with 11.9% allocation. In terms of country exposure, the fund is skewed toward the U.S. with 53.1% share while Denmark and China round off the top three spots (read: Tencent Buys 5% Stake in Tesla: ETFs in Focus).
This is an actively managed ETF seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services, technological improvement and advancements in scientific research related to robotics, energy storage, innovative materials, alternative energy sources, infrastructure development, space exploration, autonomous vehicles and 3D printing. This approach results in a basket of 37 stocks, with TSLA occupying the top spot with 11.6% share. The product has accumulated $24.7 million in its asset base and charges 75 bps in fees per year. It sees a paltry volume of about 5,000 shares a day.
First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN - Free Report)
This fund tracks the Nasdaq Clean Edge Green Energy Index and manages assets worth $55.9 million. It charges 60 bps in fees per year while trades in light volume of around 12,000 shares per day. In total, the product holds 38 U.S. securities with Tesla Motors taking the top spot in the basket at 9.8%. Industrials and technology firms dominate this ETF, accounting for nearly 28% of the assets each while oil & gas, and utilities round off the next two spots with a double-digit allocation each (read: Trump Repeals Clean Power Plan: ETF Winners & Losers).
Like ARKQ, this is also an actively managed fund and follows the same strategy but provides exposure to genomic companies, industrial innovation companies or Web x.0 companies. In total, the fund holds 47 securities in its basket, with Tesla occupying the top position holding 7.7% share. The product has accumulated $18 million in its asset base and trades in a paltry volume of about 5,000 shares. Expense ratio comes in at 0.75% (read: Innovation ETF Hits New 52-Week High).
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Ride on Surging Tesla With These ETFs
Tesla Motors (TSLA - Free Report) has become an investors’ darling and is riding high setting new milestones. This is especially true as the electric carmaker has rallied nearly double digits this week to hit a record high of $304.81.
With this surge, Tesla has become the No. 2 car company in the U.S. with a market capitalization of $49.5 billion, easily surpassing Ford Motor Co. (F - Free Report) having a market cap of $44.4 billion. The race to the big three carmakers in America auto industry has now become fierce with Tesla just $1.8 billion behind General Motors (GM - Free Report) , which saw shares plunging post disappointing sales in March. General Motors is currently worth $51.3 billion (read: Auto ETF, Stocks Tank on Dismal March Sales: Time to Buy?).
Tesla’s impressive performance is backed by better-than-expected first-quarter production and delivery numbers. Tesla delivered a record 25,000 vehicles (13,450 Model S and 11,550 Model X), up 69% year over year, during the first quarter. It produced a record 25,418 vehicles and had 4,650 vehicles in transit at the end of the quarter.
The automaker is on track to deliver 47,000–50,000 vehicles in the first half of 2017. Additionally, the company expects to produce 5,000 cars per week later in the year once production of the new Model 3 begins in July.
As Tesla is all about electric cars, its production and delivery plans matter most to investors. Currently, Tesla has a Zacks Rank #3 (Hold) with a VGM Style Score of F but has a poor Zacks Industry Rank (in the bottom 11%). Its earnings and revenues are expected to grow 48.17% and 58.55%, respectively, this year versus the industry averages of 6.30% and 1.55%. Further, its long-term growth rate is also inspiring at 30%, double the industry average growth of 14.20%. All these suggest smooth trading for the carmaker in the coming months (read: Electric Cars Find Favor with City Administrators: ETFs in Focus).
ETFs to Buy
Given the recent optimism, investors should definitely ride the upcoming surge in a basket form. Below are four ETFs with the highest allocation to this tech titan that could make for a compelling play at least in the near term.
Market Vectors Global Alternative Energy ETF
This ETF tracks the Ardour Global Index Extra Liquid, focusing on global companies that are primarily engaged in the business of alternative energy. The fund holds about 31 stocks in its basket with AUM of $68.2 million while charging 62 bps in fees per year. Average daily volume is paltry at about 6,000 shares. Tesla Motors occupies the top position in the basket with 11.9% allocation. In terms of country exposure, the fund is skewed toward the U.S. with 53.1% share while Denmark and China round off the top three spots (read: Tencent Buys 5% Stake in Tesla: ETFs in Focus).
ARK Industrial Innovation ETF (ARKQ - Free Report)
This is an actively managed ETF seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services, technological improvement and advancements in scientific research related to robotics, energy storage, innovative materials, alternative energy sources, infrastructure development, space exploration, autonomous vehicles and 3D printing. This approach results in a basket of 37 stocks, with TSLA occupying the top spot with 11.6% share. The product has accumulated $24.7 million in its asset base and charges 75 bps in fees per year. It sees a paltry volume of about 5,000 shares a day.
First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN - Free Report)
This fund tracks the Nasdaq Clean Edge Green Energy Index and manages assets worth $55.9 million. It charges 60 bps in fees per year while trades in light volume of around 12,000 shares per day. In total, the product holds 38 U.S. securities with Tesla Motors taking the top spot in the basket at 9.8%. Industrials and technology firms dominate this ETF, accounting for nearly 28% of the assets each while oil & gas, and utilities round off the next two spots with a double-digit allocation each (read: Trump Repeals Clean Power Plan: ETF Winners & Losers).
ARK Innovation ETF (ARKK - Free Report)
Like ARKQ, this is also an actively managed fund and follows the same strategy but provides exposure to genomic companies, industrial innovation companies or Web x.0 companies. In total, the fund holds 47 securities in its basket, with Tesla occupying the top position holding 7.7% share. The product has accumulated $18 million in its asset base and trades in a paltry volume of about 5,000 shares. Expense ratio comes in at 0.75% (read: Innovation ETF Hits New 52-Week High).
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 >>