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ETFs to Buy on Tesla's Record-Breaking Q4 Results

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Tesla Motors (TSLA - Free Report) reported record-breaking Q4 results, wherein it beat both earnings and revenue estimates. The company posted record quarterly revenues, operating income and net income in its history.

Shares of Tesla rallied about 10% on Jan 26 trading day. Impressed with the robust results, many analysts raised the target price on the stock, spreading optimism in the company’s growth prospect. Investors seeking to ride the bullishness could invest in ETFs having a substantial allocation to this luxury carmaker.

These include MeetKevin Pricing Power ETF (PP - Free Report) , ARK Autonomous Technology & Robotics ETF (ARKQ - Free Report) , Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report) and MicroSectors FANG+ ETN (FNGS - Free Report) that look like solid picks to play Q4 strength.

Q4 Earnings in Focus

Adjusted earnings per share came in at $1.19, easily beating the Zacks Consensus Estimate of $1.09 and improving 40% from year-ago earnings. Revenues jumped 37.2% year over year to a record $24.3 billion and edged past the Zacks Consensus Estimate of $23.81 billion (read: 5 Sector ETFs to Play on Upbeat Q4 Revenue Growth).

The company delivered 405,278 (388,131 Model 3 and Y, and 17,147 Model S and X) cars worldwide in the fourth quarter. This is up 31.5% from the year-ago quarter and 18.1% from the prior quarter. The electric carmaker produced 439,701 (419,088 Model 3 and Y, and 20,613 Model S and X) vehicles during the quarter.

The fourth quarter was extremely challenging for Tesla. This is especially true as COVID outbreaks in China caused the company to temporarily suspend and reduce production at its Shanghai factory. Additionally, the electric carmaker offered steep price cuts and other promotions in the United States, China and elsewhere in order to spur demand that has put pressure on its margins.

For 2022, the electric carmaker delivered a record 1.31 million electric vehicles, up 40% from 2021. It has ramped up production after opening new factories in Texas, Shanghai and Berlin.

ETFs to Buy

MeetKevin Pricing Power ETF (PP - Free Report)

MeetKevin Pricing Power ETF is an actively managed ETF that seeks to achieve its investment objective by investing primarily in the U.S.-listed equity securities of Innovative Companies that, in Kevin’s view, have more “pricing power” than their peers. The fund holds a small basket of 16 stocks, with Tesla occupying the top position at 29.8%.

MeetKevin Pricing Power ETF newly debuted in the space at the end of November and has accumulated $15.8 million in its asset base in a couple of months. It charges 77 bps in annual fees and trades in a lower volume of 45,000 shares a day on average.

ARK Autonomous Technology & Robotics ETF (ARKQ - Free Report)

ARK Autonomous Technology & Robotics ETF 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 38 stocks, with Tesla occupying the top spot with a 12% share (read: Will 2023 be the Year of Cathie Wood ETFs?).

ARK Autonomous Technology & Robotics ETF has accumulated $888.3 million in its asset base and charges 75 bps in fees per year. It trades in a volume of 118,000 shares a day on average.

Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)

Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index (read: 5 Top-Ranked ETFs to Buy at Bargain Prices for 2023).

Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $13.8 billion and an average daily volume of around 4.3 million shares. Holding 56 securities in its basket, Tesla takes the second spot with 11.3% of assets. Consumer Discretionary Select Sector SPDR Fund charges 10 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report)

Simplify Volt Robocar Disruption and Tech ETF is an actively managed ETF seeking concentrated exposure to the leader of autonomous driving technology. It employs a call option overlay to seek boosts in performance during extreme moves up in Tesla while holding a tech index for diversification and put options as a hedge.

Simplify Volt Robocar Disruption and Tech ETF charges investors 0.95% in annual fees. It has accumulated $2.8 million in its asset base while trading in an average daily volume of 3,000 shares.

MicroSectors FANG+ ETN (FNGS - Free Report)

MicroSectors FANG+ 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 equal-weighted stocks in its basket, with Tesla accounting for a 10% share.

MicroSectors FANG+ ETN has accumulated $53.3 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 27,000 shares and has a Zacks ETF Rank #3 (Hold).
 

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