The Zacks Analyst Blog Highlights: Tesla Motors, Market Vectors Global Alternative Energy ETF and First Trust NASDAQ Clean Edge Green Energy Index Fund
CHICAGO, Nov. 10, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Tesla Motors (Nasdaq:TSLA-Free Report), Market Vectors Global Alternative Energy ETF (AMEX:GEX-Free Report) and First Trust NASDAQ Clean Edge Green Energy Index Fund (Nasdaq:QCLN-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Thursday's Analyst Blog:
3 ETFs to Watch on Tesla's Mixed Bag
Tesla Motors (Nasdaq:TSLA-Free Report) reported mixed third-quarter results after the closing bell on Wednesday, beating on revenues but missing on earnings. Though the electric carmaker lowered its delivery projection, it is confident in its Model S outlook.
Tesla Earnings in Focus
Adjusted loss per share came in at 25 cents in the quarter, significantly wider than the Zacks Consensus Estimate of loss of 15 cents. Revenues climbed 54.7% year over year to $932.3 million and were well ahead of the Zacks Consensus Estimate of $868 million.
The company delivered a record 7,785 Model S cars in the third quarter, slightly below its own expectation of 7,800 cars but up 41.5% from the year-ago quarter. Additionally, it projects delivery of about 33,000 cars for the full fiscal year, down from the previous expectation of 35,000 (read: Lukewarm Auto Stock Earnings Put Car ETF in Focus).
The lowered outlook stems from a two-week factory shutdown, delaying of Model X deliveries, and increased complexity of its new all-wheel-drive models. Tesla delayed the deliveries of Model X crossover by a few months to the third quarter of 2015. In addition, Tesla expects earnings per share of 30–35 cents for the fourth quarter. The Zacks Consensus Estimate is currently pegged at 36 cents.
Despite the production setback and lower earnings, the company stated that the demand for the current Model S is well ahead of its production capacity. As a result, Model S sales are expected to grow 50% to nearly 50,000 next year and will likely continue to rise at the same pace for several years.
This has led to investors' enthusiasm in the company's long-term growth story and thus, shares of TSLA jumped as much as 6.8% in yesterday's trading session on elevated volumes of 2.5 times the normal day. This is especially true as the company made it very clear that the issue is just on the production side and demand remains solid (read: Alternative Energy ETF Investing 101).
Further, the automaker is investing heavily in increasing production capacity, development of Model S and Model X, the Gigafactory construction and expansion of sales, services and Supercharger infrastructure. However, the stock currently has an unfavorable Zacks Rank # 5 (Strong Sell) and a poor Zacks Industry Rank in the bottom 6%.
ETFs to Watch
Given this and positive investor sentiment following the mixed Q3 earnings release, some of the ETFs having substantial allocation of this luxury carmaker would be in focus in the coming days. Investors should closely monitor the movement in these funds and grab opportunities from a rising stock price or avoid them if the stock drags them down:
Market Vectors Global Alternative Energy ETF (AMEX:GEX-Free Report)
This ETF tracks the Ardour Global Index, 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 $91.9 million while charging 62 bps in fees per year. Average daily volume is paltry at under 12,000 shares per day on average. Tesla occupies the third position in the basket with 9.39% allocation (see: all the Alternative Energy ETFs here).
From a sector perspective, industrials take the largest share with 43% while information technology and utilities round off the next two spots. In terms of country exposure, the fund is skewed toward the U.S. with 63.5% share while Denmark, China, Italy and many others receive minor allocations. The ETF added about 0.5% yesterday and has a Zacks ETF Rank of 4 or 'Sell' rating.
First Trust NASDAQ Clean Edge Green Energy Index Fund (Nasdaq:QCLN-Free Report)
This fund tracks the Nasdaq Clean Edge Green Energy Index and manages assets worth $109.9 million. It charges 60 bps in fees per year while trades in volume of more than 100,000 shares per day suggesting a relatively tight bid/ask. In total, the product holds 48 U.S. securities in its basket with Tesla Motors taking the second spot at 8.28% (read: 3 Clean Energy ETFs for a Green Portfolio).
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 lost 1% on the day and has a Zacks ETF Rank of 3 or 'Hold' rating.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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