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Tesla to Continue Stellar Run Post Q1: Buy These ETFs
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After the closing bell on Wednesday, electric carmaker Tesla Motors (TSLA - Free Report) yet again reported a big loss for the first quarter of 2017, widely missing our earnings estimates. However, revenues more than doubled from a year-ago period and beat our estimates on record deliveries (read: Forget Earnings: Play Revenue Growth with 4 ETFs).
Tesla Q1 in Focus
Adjusted loss per share came in at $1.97, wider than the Zacks Consensus Estimate of a loss of $0.67. Revenues more than doubled to $2.70 billion and edged past the Zacks Consensus Estimate of $2.56 billion.
Tesla delivered a record 25,051 vehicles (13,450 Model S and 11,550 Model X), up 64% year over year. 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 and increase the number to 10,000 vehicles per week in 2018.
Tesla also announced the launch of small SUV – the Model Y – by 2020, which seems to be a sensible move as a number of other major automakers, such as Audi, Volvo, and Mercedes are planning to roll out electric SUVs by 2020.
Tesla has rallied nearly 46% this year to become the No. 1 car company in the U.S. with a market capitalization of $52.01 billion, easily surpassing Ford Motor (F - Free Report) and General Motors (GM - Free Report) last month. Tesla’s robust car deliveries and the scheduled Model 3 launch is lending support to the high-flying share price. However, the wider-than expected Q1 loss sent shares of Tesla down 2.3% in aftermarket hours (read: Ride on Surging Tesla With These ETFs).
As Tesla is all about electric cars, its production and delivery plans matter most to investors rather than earnings miss or beat. As a result, the fall in Tesla share price could be temporary and will continue to surge in the months ahead.
Currently, Tesla has a solid Zacks Rank #2 (Buy) with a robust Zacks Industry Rank in the bottom 26% but has a disappointing VGM Style Score of F. Its earnings and revenues are expected to grow 48.17% and 56.47%, respectively, this year versus the industry averages of 6.70% and 1.73%. Further, its long-term growth rate of 30% – double the industry average growth of 14.60% – is also inspiring. All these suggest smooth trading for the carmaker in the coming months.
ETFs in Focus
Given this, many investors may want to ride the upcoming surge in a basket form. Below, we highlight four ETFs with the highest allocation to this luxury carmaker that could be great plays for investors in the coming days.
VanEck 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 $73.8 million while charging 62 bps in fees per year. Average daily volume is paltry at about 6,000 shares. Tesla occupies the top position in the basket with 11% allocation. In terms of country exposure, the fund is skewed toward the U.S. with 52% share while Denmark and Spain round off the top three spots. It has gained 14% in the year-to-date timeframe (read: Will Trump Era Spell Trouble for Alternative Energy ETFs?).
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 second spot with 11% share. The product has accumulated $37.4 million in its asset base and charges 75 bps in fees per year. It sees a paltry volume of about 9,000 shares a day and has risen 21.4% so far this year.
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 $56.5 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 9.9%. Industrials and technology firms dominate this ETF, accounting for at least 27% of the assets each while oil & gas, and utilities round off the next two spots with a double-digit allocation each. QCLN has added 8.8% in the same timeframe (read: Trump Repeals Clean Power Plan: ETF Winners & Losers).
ARK Innovation ETF (ARKK)
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 49 securities in its basket, with Tesla occupying the third position holding 6.8% share. The product has accumulated $21.8 million in its asset base and trades in a paltry volume of about 5,000 shares. Expense ratio comes in at 0.75%. The ETF is up 27.6% so far this year.
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Tesla to Continue Stellar Run Post Q1: Buy These ETFs
After the closing bell on Wednesday, electric carmaker Tesla Motors (TSLA - Free Report) yet again reported a big loss for the first quarter of 2017, widely missing our earnings estimates. However, revenues more than doubled from a year-ago period and beat our estimates on record deliveries (read: Forget Earnings: Play Revenue Growth with 4 ETFs).
Tesla Q1 in Focus
Adjusted loss per share came in at $1.97, wider than the Zacks Consensus Estimate of a loss of $0.67. Revenues more than doubled to $2.70 billion and edged past the Zacks Consensus Estimate of $2.56 billion.
Tesla delivered a record 25,051 vehicles (13,450 Model S and 11,550 Model X), up 64% year over year. 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 and increase the number to 10,000 vehicles per week in 2018.
Tesla also announced the launch of small SUV – the Model Y – by 2020, which seems to be a sensible move as a number of other major automakers, such as Audi, Volvo, and Mercedes are planning to roll out electric SUVs by 2020.
Tesla has rallied nearly 46% this year to become the No. 1 car company in the U.S. with a market capitalization of $52.01 billion, easily surpassing Ford Motor (F - Free Report) and General Motors (GM - Free Report) last month. Tesla’s robust car deliveries and the scheduled Model 3 launch is lending support to the high-flying share price. However, the wider-than expected Q1 loss sent shares of Tesla down 2.3% in aftermarket hours (read: Ride on Surging Tesla With These ETFs).
As Tesla is all about electric cars, its production and delivery plans matter most to investors rather than earnings miss or beat. As a result, the fall in Tesla share price could be temporary and will continue to surge in the months ahead.
Currently, Tesla has a solid Zacks Rank #2 (Buy) with a robust Zacks Industry Rank in the bottom 26% but has a disappointing VGM Style Score of F. Its earnings and revenues are expected to grow 48.17% and 56.47%, respectively, this year versus the industry averages of 6.70% and 1.73%. Further, its long-term growth rate of 30% – double the industry average growth of 14.60% – is also inspiring. All these suggest smooth trading for the carmaker in the coming months.
ETFs in Focus
Given this, many investors may want to ride the upcoming surge in a basket form. Below, we highlight four ETFs with the highest allocation to this luxury carmaker that could be great plays for investors in the coming days.
VanEck 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 $73.8 million while charging 62 bps in fees per year. Average daily volume is paltry at about 6,000 shares. Tesla occupies the top position in the basket with 11% allocation. In terms of country exposure, the fund is skewed toward the U.S. with 52% share while Denmark and Spain round off the top three spots. It has gained 14% in the year-to-date timeframe (read: Will Trump Era Spell Trouble for Alternative Energy ETFs?).
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 second spot with 11% share. The product has accumulated $37.4 million in its asset base and charges 75 bps in fees per year. It sees a paltry volume of about 9,000 shares a day and has risen 21.4% so far this year.
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 $56.5 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 9.9%. Industrials and technology firms dominate this ETF, accounting for at least 27% of the assets each while oil & gas, and utilities round off the next two spots with a double-digit allocation each. QCLN has added 8.8% in the same timeframe (read: Trump Repeals Clean Power Plan: ETF Winners & Losers).
ARK Innovation ETF (ARKK)
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 49 securities in its basket, with Tesla occupying the third position holding 6.8% share. The product has accumulated $21.8 million in its asset base and trades in a paltry volume of about 5,000 shares. Expense ratio comes in at 0.75%. The ETF is up 27.6% so far this year.
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 >>