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ETFs to Soar as Tesla Beats on Q4 Earnings, Shares Spike
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After the closing bell on Wednesday, Tesla Motors (TSLA - Free Report) maintained its hottest streak following stellar fourth-quarter of 2019 results, wherein it easily topped earnings and revenue estimates. Additionally, the company guided an increase in 2020 deliveries from last year (read: Tesla Crosses $100B Ahead of Q4 Earnings: ETFs in Focus).
Q4 Earnings in Focus
Adjusted earnings per share came in at $2.14, well above the Zacks Consensus Estimate of $1.62 and better than the year-ago earnings of $1.93. Revenues inched up 2% year over year to $7.38 billion and edged past the Zacks Consensus Estimate of $7.04 billion.
Earlier this month, Tesla revealed that it had produced a record 105,000 (86,958 Model 3 and 17,933 Model S and X) vehicles and delivered a record 112,000 (92,550 Model 3 and 19,450 Model S and X) vehicles. This pushed 2019 total deliveries to 367,500 vehicles, up 50% from 2018 and in line with its guidance range of 360,000-400,000 vehicles. For 2020, the company expects deliveries to comfortably exceed 500,000 units (read: Tesla Reports Record Q4 Deliveries: ETFs to Ride the Surge).
The electric carmaker said the Shanghai plant has reached a production rate of 1,000 units per week. It started production of the new Model Y, an electric crossover utility vehicle, this month and plans to deliver the first model by the end of March, ahead of schedule. Due to the ramp of Model 3 in Shanghai and Model Y in Fremont, production will likely outpace deliveries this year. Both solar and storage deployments should grow at least 50% in 2020. However, Tesla expects a “one- to one-and-a-half-week delay in the ramp up of the Shanghai-built Model 3 due to a government-required factory shutdown” related to the deadly coronavirus.
Given robust results, shares of Tesla spiked as much as 14% to new all-time highs in aftermarket trading. The stock currently has a Zacks Rank #2 (Buy) and a Growth Score of A. It belongs to a bottom-ranked Zacks industry (in the bottom 31%).
ETFs to Buy
Investors seeking to tap Tesla’s growth story should buy ETFs having substantial allocation to this luxury carmaker. We highlight five of them in detail below.
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 as well as technological improvement and advancements in scientific research related to energy, automation and manufacturing, materials and transportation. This approach results in a basket of 37 stocks with TSLA occupying the top spot with 13.6% share. The product has accumulated $179.7 million in its asset base and charges 75 bps in fees per year.
This is an actively managed fund seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research relating to the areas of DNA technologies (Genomic Revolution), industrial innovation in energy, automation and manufacturing (Industrial Innovation), the increased use of shared technology, infrastructure and services (Next Generation Internet), and technologies that make financial services more efficient. In total, the fund holds 39 securities in its basket with Tesla occupying the top position, accounting for 10.4% share. The product has gathered $2 billion in its asset base.
This fund offers a pure play global exposure to 33 auto stocks by tracking the NASDAQ OMX Global Auto Index. Tesla is the top firm accounting for 10.1% share. CARZ has a lower level of $18.3 million in AUM and charges 70 bps in fees per year. The product has a Zacks ETF Rank #3 (Hold) with High risk outlook (read: Take a Sneak Peek at Auto ETFs & Stocks for 2020).
This ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar weighted index, designed to provide exposure to a group of highly-traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 stocks in its basket with Tesla occupying the ninth position with 10% share. The product has accumulated $35.4 million in its asset base within three months of debut and charges 58 bps in annual fees (read: Ride on Tesla's Hottest Run With These ETFs).
This ETF tracks the Ardour Global Index Extra Liquid, which focuses on the performance of low carbon energy companies primarily engaged in alternative energy. It holds about 30 stocks in its basket with AUM of $108.6 million while charging 63 bps in fees per year. Tesla occupies the top position in the basket with 9.5% allocation. In terms of country exposure, the fund is skewed toward the United States with 71% share while Denmark and China round off the next two spots.
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ETFs to Soar as Tesla Beats on Q4 Earnings, Shares Spike
After the closing bell on Wednesday, Tesla Motors (TSLA - Free Report) maintained its hottest streak following stellar fourth-quarter of 2019 results, wherein it easily topped earnings and revenue estimates. Additionally, the company guided an increase in 2020 deliveries from last year (read: Tesla Crosses $100B Ahead of Q4 Earnings: ETFs in Focus).
Q4 Earnings in Focus
Adjusted earnings per share came in at $2.14, well above the Zacks Consensus Estimate of $1.62 and better than the year-ago earnings of $1.93. Revenues inched up 2% year over year to $7.38 billion and edged past the Zacks Consensus Estimate of $7.04 billion.
Earlier this month, Tesla revealed that it had produced a record 105,000 (86,958 Model 3 and 17,933 Model S and X) vehicles and delivered a record 112,000 (92,550 Model 3 and 19,450 Model S and X) vehicles. This pushed 2019 total deliveries to 367,500 vehicles, up 50% from 2018 and in line with its guidance range of 360,000-400,000 vehicles. For 2020, the company expects deliveries to comfortably exceed 500,000 units (read: Tesla Reports Record Q4 Deliveries: ETFs to Ride the Surge).
The electric carmaker said the Shanghai plant has reached a production rate of 1,000 units per week. It started production of the new Model Y, an electric crossover utility vehicle, this month and plans to deliver the first model by the end of March, ahead of schedule. Due to the ramp of Model 3 in Shanghai and Model Y in Fremont, production will likely outpace deliveries this year. Both solar and storage deployments should grow at least 50% in 2020. However, Tesla expects a “one- to one-and-a-half-week delay in the ramp up of the Shanghai-built Model 3 due to a government-required factory shutdown” related to the deadly coronavirus.
Given robust results, shares of Tesla spiked as much as 14% to new all-time highs in aftermarket trading. The stock currently has a Zacks Rank #2 (Buy) and a Growth Score of A. It belongs to a bottom-ranked Zacks industry (in the bottom 31%).
ETFs to Buy
Investors seeking to tap Tesla’s growth story should buy ETFs having substantial allocation to this luxury carmaker. We highlight five of them in detail below.
ARK Autonomous Technology & Robotics 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 as well as technological improvement and advancements in scientific research related to energy, automation and manufacturing, materials and transportation. This approach results in a basket of 37 stocks with TSLA occupying the top spot with 13.6% share. The product has accumulated $179.7 million in its asset base and charges 75 bps in fees per year.
ARK Innovation ETF (ARKK - Free Report)
This is an actively managed fund seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research relating to the areas of DNA technologies (Genomic Revolution), industrial innovation in energy, automation and manufacturing (Industrial Innovation), the increased use of shared technology, infrastructure and services (Next Generation Internet), and technologies that make financial services more efficient. In total, the fund holds 39 securities in its basket with Tesla occupying the top position, accounting for 10.4% share. The product has gathered $2 billion in its asset base.
First Trust NASDAQ Global Auto ETF (CARZ - Free Report)
This fund offers a pure play global exposure to 33 auto stocks by tracking the NASDAQ OMX Global Auto Index. Tesla is the top firm accounting for 10.1% share. CARZ has a lower level of $18.3 million in AUM and charges 70 bps in fees per year. The product has a Zacks ETF Rank #3 (Hold) with High risk outlook (read: Take a Sneak Peek at Auto ETFs & Stocks for 2020).
MicroSectors FANG+ ETN (FNGS - Free Report)
This ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar weighted index, designed to provide exposure to a group of highly-traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 stocks in its basket with Tesla occupying the ninth position with 10% share. The product has accumulated $35.4 million in its asset base within three months of debut and charges 58 bps in annual fees (read: Ride on Tesla's Hottest Run With These ETFs).
VanEck Vectors Low Carbon Energy ETF (SMOG - Free Report)
This ETF tracks the Ardour Global Index Extra Liquid, which focuses on the performance of low carbon energy companies primarily engaged in alternative energy. It holds about 30 stocks in its basket with AUM of $108.6 million while charging 63 bps in fees per year. Tesla occupies the top position in the basket with 9.5% allocation. In terms of country exposure, the fund is skewed toward the United States with 71% share while Denmark and China round off the next two spots.
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 >>