The popular maker of electric cars,
Tesla Motors Inc.
), recently faced some stiff restrictions from the state of New
Jersey, which has banned the direct sale of automobiles in the
The law necessitates the use of middle-men or franchised retail
dealers to sell cars in the state. The majority of car makers use
middle-men to sell their cars. However, the recent move is expected
to hurt the electric car industry. It will definitely jeopardize
Tesla's growth plans given that it has only two stores in the
New Jersey has become the third state to ban Tesla from selling
cars directly to consumers. Arizona and Texas had earlier placed
restrictions on Tesla directly selling cars to customers (read:
Solid Tesla Earnings Put These ETFs in Focus
Tesla believes that it is imperative to sell the cars directly to
consumers in order to properly educate them about the relatively
new technology. The company is believed to have already begun
negotiations with New Jersey lawmakers about amending the current
Though Tesla's shares prices had dipped around 2% to close at
$234.41 on the day the news was made public, its shares have
recovered somewhat and closed at $237.79 in yesterday's trading
session. The company's share prices might be volatile in the coming
days; however, investors can use these dips to accumulate Tesla
This is especially true because Tesla currently has a favorable
Zacks Rank of "2", suggesting that its outperformance is expected
to continue in the coming months as well.
The stock has returned an outstanding 325% in 2013, beating all the
popular market indices. Moreover, the stock is up 58.4% since the
start of the year. The company is witnessing rising sales on the
back of its impressive product portfolio.
Moreover, the company is actively undertaking international
expansion to further boost its sales.
Tesla's Model S
has been named as the top car for 2014 by a leading magazine.
While purchasing the stock is certainly an option, investors can
also own the shares by purchasing ETFs having an exposure to the
stock. Below we have highlighted two ETFs that have double-digit
exposure to Tesla Motors.
Investors should keep a close eye on these ETFs and can use the
dips as a buying opportunity. While QCLN has lost around 1%, GEX
has lost 1.6%, since the ban was made public (read:
all the Alternative Energy ETFs here
NASDAQ Clean Edge Green Energy Index Fund
The fund tracks the NASDAQ Clean Edge Green Energy Index and
manages an asset base of $194.7 billion.
The fund holds a small basket of 42 stocks and Tesla occupies the
top spot among them. QCLN has 12.55% exposure to Tesla, being the
only stock with double-digit allocation. Linear Technology
Corporation (7.44%) and Cree, Inc. (6.96%) are the other two stocks
in the top three spots.
The fund has delivered a stellar return of 82% in the last one
year. The fund currently has a Zacks ETF Rank #1 (Strong Buy) and
is expected to continue with its outperformance.
This is especially true as the alternative energy sector is
currently one of the booming industries in the energy sector, given
concerns about carbon emission, climate change plans and other
environmental issues (read:
A Beginner's Guide to Alternative Energy ETFs
Market Vectors Global Alternative Energy ETF
GEX too focuses on the alternative energy sector and tracks the
Ardour Global Index. The fund is home to 31 stocks and Tesla Motors
(13.79%) occupies the top spot here as well. Like QCLN, this fund
too has double-digit exposure to only Tesla Motors.
The fund is heavily weighted to the Industrial and IT sectors,
which together comprise around 70% of the fund assets. Country
wise, the fund has 60% exposure to U.S. stocks, while China (10.1%)
and Denmark (8%) are the other two counties in the top three.
The fund has returned quite well last year, adding 60.4% in 2013.
Moreover, the fund is up 9.3% this year (read:
5 Best Performing ETFs of the 5 Year Bull Run
It is quite clear that the huge exposure to Tesla Motors in the
above ETFs has worked quite favorably for them. Given the promising
alternative energy sector and the fact that Tesla is expected to
continue to outperform, investors can look forward to gain from any
surge in this space from the above two ETFs.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report >>
MKT VEC-GLBL AE (GEX): ETF Research Reports
NASDAQ-CL EDG G (QCLN): ETF Research Reports
TESLA MOTORS (TSLA): Free Stock Analysis Report
To read this article on Zacks.com click here.
Want the latest recommendations from Zacks
Investment Research? Today, you can download 7 Best Stocks for the
Next 30 Days. Click to get this free report