Five ETFs Riding On Tesla Motors' Q4 Performance


Shutterstock photo

Tesla Motors' investors took their foot off the brake late Wednesday after the company reported both earnings and a 2014 outlook that topped expectations.

Down some 5% from a record high during normal-session trading, Tesla's stock zoomed up as much as 15% after the close. (See story here )

Some analysts believe the electric-car maker's shares have raced ahead too far too fast -- up 30% year to date and a mind-boggling 398% in the past 12 months -- for a company that's yet to deliver a profit. Any misstep could trigger another train wreck like Tesla's Q3 sell-off.

Here's a look at five ETFs riding on the powerhouse founded by Elon Musk. Some 3.7% of the electric-car maker's stock is owned by 72 ETFs on the stock market , according to

The stock is uniquely positioned as not only an auto-sector play but also as clean energy, consumer goods, high-growth, momentum, socially responsible and initial public offering investment.

1.Market Vectors Global Alternative Energy ( GEX ) holds 31 stocks, weighting Tesla at 12% as its largest position. It combines solar energy, biofuels, wind power, hydroelectric power and geothermal energy firms:Eaton ( ETN ),Cree ( CREE ) andVestas Wind Systems ( VWDRY ). GEX outshined SPDR S&P 500 SPY in the past year, rallying 55% vs. 20% as bargain hunters reignited demand in battered solar-energy stocks.

2.First Trust Nasdaq Clean Edge Green Energy Index ( QCLN ), with an 11% weighting in Tesla, holds 42 companies engaged in making clean-energy technologies such as biofuels and batteries including Cree,Linear Technology (LLTC) andFirst Solar (FSLR). QCLN is up 9% this year and 72% in the past 12 months.

3.First Trust Nasdaq Global Auto Index (CARZ), with 38 names led byDaimler AG (DDAIF),Volkswagen (VLKAY) andToyota Motor (TM), has 5% of its assets in Tesla.

4.Columbia Select Large Cap Growth (RWG) is an actively managed ETF that screens for high-quality franchises with above-average earnings growth potential. It weights Tesla at nearly 4% of assets among its 32 holdings, which includePriceline (PCLN), (CRM) andMichael Kors (KORS) .

5. First Trust U.S.IPO Index (FPX) -- with a little less than 3% of its assets in Tesla -- is dominated byFacebook (FB),AbbVie (ABBV) andGeneral Motors (GM) among its 100 names.

Tesla's fourth-quarter Model S vehicle sales of 6,900 units -- a record high -- eclipsed forecasts of 6,000 by 15%. Full-year sales tallied 22,400 as demand outstripped production capabilities.

S&P Capital IQ expects 2014 revenue to climb 78% as earnings hit $1.46 a share -- an exponential rise over 4 cents a share in 2013. Operating and research and development costs are expected to rise as the company rolls out the Model X SUV.

"Tesla's fresh story of innovative electric vehicles with industry-leading all-electric driving range and strong safety review is attractive," S&P analyst Efraim Levy wrote in a note Feb. 15, rating shares a hold. "Its unique business model and technological leadership give it an advantage over peers."

Litchfield Hills Research of Lakeville, Conn., rated Tesla buy with a $222 price target. "As long as there is a large group of investors who compare Tesla to a traditional automaker, the stock will remain undervalued," Litchfield analyst Theodore O'Neill wrote in a note Feb. 18. "Investors underestimate the appeal of the Model S and the sales and service experience."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing ETFs
Referenced Stocks: GEX , ETN , CREE , VWDRY , QCLN

More from Investor's Business Daily


Investor's Business Daily

Investor's Business Daily

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by