Tesla Motors (TSLA) reinforced its growth story with robust fiscal Q4 2013 results and an encouraging production plan for its Model S cars.
Tesla Earnings in Focus
The high-end electric car manufacturer has fired on all cylinders from top to bottom line. Earnings per share came in at 14 cents that easily crushed the Zacks Consensus Estimate of 4 cents. Revenues more than doubled from the year-ago quarter to $761 million, and was well above the Zacks Consensus Estimate of $700 million.
Robust performance was driven by strong demand for its Model S electric car. The company delivered 6,892 Model S cars in the final quarter of 2013, bringing the total vehicle count to 22,477 for the full year. This represents the highest sales for any quarter in the company’s history .
Solid Model S Production Outlook
The automaker projects to deliver more than 35,000 Model S cars in 2014, up 55% from 2013.
Production is expected to increase from the current 600 cars per week to nearly 1,000 cars per week by the end of 2014. However, Tesla warned that tight battery supplies could hurt production in the first half.
For the first quarter, Model S production would rise from 6,587 cars to 7,400 cars while deliveries would be 6,400.
The company is expanding its customer base to Europe and China, and expects to sell the first Model S to China in spring this year. Further, Tesla intends to offer the new Model X SUV by the year end.
Market Impact
Driven by solid earnings growth and an upbeat outlook, Tesla shares rose 12% in after-market trading on Wednesday on heavy volume. With this, Tesla continued to be the favorite pick among growth investors and gained nearly 400% over the past year.
The bullish trend will likely continue in the coming months given that Tesla has a Zacks Rank #1 (Strong Buy). This suggests smooth trading for some of the ETFs that have substantial allocation to this electric carmaker, and for those that are tied to the green energy trend.
ETFs to Consider
Below, we have highlighted two ETFs having double-digit allocation to TSLA that would be in focus in the coming days. Investors should closely monitor the movement in these funds and could catch the opportunity from any surge in the TSLA price:
- First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN)
This fund tracks the Nasdaq Clean Edge Green Energy Index and managed assets worth $146 million. It charges 60 bps in fees per year while trades in volume of less than 72,000 shares per day suggesting a relatively wide bid/ask. In total, the product holds 42 securities in its basket. Tesla Motors occupies the top spot with 11.19% of assets.
Technology firms dominate this ETF, accounting for over one-third of the assets while oil & gas, and industrials round off to the next two spots. QCLN is up over 8.54% in the year-to-date time frame and has a Zacks ETF Rank of 1 or ‘Strong Buy’ rating with a ‘High’ risk outlook.
- Market Vectors Global Alternative Energy ETF (GEX)
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 $100.5 million while charging 62 bps in fees per year. Average daily volume is paltry for this fund. Here again, TSLA is the top firm with 11.33% allocation.
From a sector perspective, industrials take the largest share with 38.1%, closely followed by information technology (33.9%) and utilities (13.0%). In terms of country exposure, the fund is skewed toward the U.S. with 61.9% share while Denmark, Ireland, China, Italy and many others receive minor allocations. The ETF gained over 5% year to date.