After being hit by disappointing third quarter results and three Model S fires in recent months, the high-end electric car manufacturer, Tesla Motors (TSLA - Analyst Report) , finally got a reason to cheer. The company reported strong sales for its Model S sedan for the fourth quarter, at the Detroit Auto Show (read: Tesla Motor Fires Hit Lithium ETF).
Solid 4Q Sales and Outlook
The automaker sold 6,900 Model S vehicles in the final quarter of 2013, up 15% from its own expectation and 25% from the third quarter. This also marked the highest sales in the company’s history.
Based on stronger-than-expected sales, Tesla issued a ‘recall’ action (software update) for 29,222 Model S sedans from 2013 to provide upgraded wall adapter and charging software in order to prevent overheating and possible fires.
Going forward in 2014, Tesla expects to double its sales and service footprint globally and intends to offer the new Model X SUV by the year end. Further, the company will start selling the Model S in China early this year and deliver more vehicles to Europe (read: Robust Car Sales Bring Auto ETF in Focus).
This news has created optimism on the company’s growth outlook and Tesla stock. TSLA shares jumped nearly 16%, representing the biggest one-day increase since December 3rd.
Given the surge in the stock price, the ETFs having highest allocation to this auto company enjoyed huge gains on the day and are likely to be in focus in the coming days. Below, we have highlighted two ETFs for investors that really benefited from this solid sales figure, and the continuation of the TSLA growth story:
First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN - ETF report)
This fund tracks the NASDAQ Clean Edge Green Energy Index and manages assets worth $11.5 million. It charges 60 bps in fees per year while volume is light suggesting wide bid/ask spread (read: Will the Clean Energy ETF Surge Continue in 2014?).
In total, the product holds 43 securities in its basket. Out of these, Tesla occupies the top position in the basket with 8.34% of assets. Technology firms dominate this ETF, accounting for over three-fifths of the assets, while oil & gas and industrials make up for double-digit share each.
QCLN gained 4.11% on the session and is up about 4.58% year-to-date. The fund has a Zacks ETF Rank of 1 or ’Strong Buy’ with High risk outlook.
Market Vectors Global Alternative Energy ETF (GEX - ETF report)
This ETF tracks the Ardour Global Index, focusing on companies that are primarily engaged in the business of alternative energy. The fund holds about 31 stocks in its basket with AUM of $92.3 million while charging 62 bps in fees per year. Average daily volume is also paltry for this fund (see: all the Alternative Energy ETFs here).
Here, TSLA takes the second spot in the basket with 9.60% allocation. From a sector perspective, industrials take the largest share with 45.3%, closely followed by information technology (27.2%) and utilities (13.6%).
In terms of country exposure, the fund is skewed toward the U.S. with 61.4% share, while China, Denmark, Italy and many others receive minor allocations.
The ETF added 3.55% on the session, and is up 4.34% so far this year.
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