Tesla Motors (NASDAQ TSLA reported earnings on Wednesday. The company posted strong profits for the third period, exceeding analysts’ expectations in terms of both earnings and sales. The electric vehicle manufacturer posted record sales and one of the largest profit margins in company history.
Notable is the fact that adjusted profits per share reached $1.86 in the latest quarter. This surpasses the Zacks Consensus Estimate at $1.39 and exceeds the earnings of 76cs in the previous year. The company exceeded the Zacks Consensus Estimate by surpassing $13.16 billion in revenue year-over-year with a 56.8% increase in revenues.
In addition, Tesla car sales increased by 77.4% over the past year. Meanwhile, “services” and others such as its acquisition of Bitcoin (BTC), boosted gross earnings by 74.6 percent. The company’s strong performance was also helped by Model 3 and Model Y’s record car deliveries.
Zacks, therefore, identified four ETFs with double-digit exposure to Tesla in order to capitalize on its success.
#1 ARK Industrial Innovation ET (ARKQ)
ARK Industrial Innovation ET is an exchange-traded fund that actively manages companies that benefit from new products and services.
The result is a basket consisting of 46 equities, with TSLA having the largest share (11.3%). This product has $2.5 billion of assets under management. It charges an annual fee of 75 basis points (bps), and trades an average of 292,000 shares daily.
While the long-term trend remains neutral, the short-term trend suggests that investors and traders are starting to like the fund. Over the past month, ARKQ traded in the $75.89 – $83.52 range and is currently trading at the top.
#2 ARK Next Generation Internet ETF ARKW
This fund focuses on businesses that are expected to benefit from the move towards the cloud as a result of the technological infrastructure transition.
Tesla, which represents 10% of actively managed funds’ holdings, is the most valuable stock. The ETF’s asset base is $5.4 billion and the annual fees are 79bps. It trades an average of 650,000 shares per day from the 48 stocks it has in its basket.
ARKW traded in the $135.35 – $156.69 range for the past month and is currently trading at the top of that range.
While the short-term trend is positive and the long-term trend neutral, some uncertainty could be detected in the mid-term time frame. However, recent actions have been very positive.
#3 ARK Innovation ETF ARKK
ARKK is an actively managed fund that invests only in companies that make money from new products or services, technological breakthroughs, and scientific research. The fund’s investment objective aims to produce long-term capital growth.
Tesla, which holds 10% of the portfolio’s 51 equity, is the largest holding. The product charges investors 75bps annually in fees for $20.8 billion of assets. The product trades an average of 5.4 million shares per day.
ARKK traded between $106.35 and $120.76, which is a wide range. It is currently trading at the top end of this price range.
The ETF’s short-term trend is positive and long-term trend neutral. This indicates that it is trending upward.
#4 Simplify Volt Robocar Disruption (VCAR), and Tech ETF(VCAR).
This ETF is actively managed and aims to provide concentrated exposure to Tesla, the world leader in self-driving cars technology. Options can be used to diversify the exposure. It has a 25% stake in Tesla shares and the Tesla call option, so it is well-positioned to get exposure to Tesla stock and options.
The fund charges investors a yearly fee of 0.95% to help it improve its performance during times of high Tesla volatility. The company has an asset accumulation of $1.9 million. It trades on average 1,000 shares per day on the stock exchange.
VCAR traded in a range of $11.50 – $14.72 for the past month. This is a substantial range and it is currently trading at the top. It is encouraging to see both short-term as long-term trends being positive.