Investors in Tesla, Inc. TSLA need to pay close attention to the stock based on moves in the options market lately. That is because the Oct 20, 2023 $15.00 Call had some of the highest implied volatility of all equity options toda
The NASDAQ 100 Pre-Market Indicator is down -36.68 to 15,165.72. The total Pre-Market volume is currently 48,236,284 shares traded.The following are the most active stocks for the pre-market session: ProShares UltraPro Short QQQ (SQQQ) is +0.13 at $18.95, with 2,764,970 shares t
China's central bank and forex regulator met with foreign financial institutions and companies on Monday, as Beijing strives to attract overseas investment to support its recovery.
Saudi Arabia is in early talks with U.S. electric automaker Tesla to set up a manufacturing facility in the kingdom, the Wall Street Journal reported on Monday, citing sources familiar with the matter.
Tesla (NASDAQ: TSLA) has been one of the hottest stocks of 2023 so far. The electric vehicle (EV) maker's shares have skyrocketed more than 120%. But that could be just the tip of the iceberg.
Volatility has been readily apparent on Wall Street for more than three years. Investors have been taken for quite the ride, which has included two bear markets (2020 and 2022), as well as a period where the stock market appeared virtually unstoppable (2021).
EV (Electric Vehicle) giant Tesla (
NASDAQ:TSLA
) boasts of industry-leading margins, allowing it to aggressively cut the average selling price to sell more vehicles and maintain its leadership in the EV space. Now, with the
UAW (United Auto Workers) strike likely to drive up labor costs for its ICE (Internal Combustion Engine) peers, including General Motors (
NYSE:GM
), Ford (
NYSE:F
), and Stellantis (
NYSE:STLA
), Tesla will have more room to lower its prices and push volumes.
Last week, Ford Motor Company said the UAW’s proposals, if implemented, would more than double the company’s current UAW-related labor costs. Ford highlighted that its labor costs are already much higher than those of Tesla and other automakers who utilize non-union-represented labor. This will make it an uphill task for Ford, GM, and Stellantis to put up a fight against Tesla, as they are still in the early stages of the ICE to EV transition.
Echoing similar sentiments,
Wedbush analyst Daniel Ives, on September 15, said that he sees Tesla as one of the top beneficiaries of the strike. The production disruption and higher labor costs will make it tough for GM, Ford, and Stellantis to challenge Tesla’s leadership in the EV space. Ives is bullish about TSLA and has a price target of $350.
Investors should note that Ives is the most accurate analyst for TSLA stock, according to TipRanks. Copying his trades on TSLA stock and holding each position for one year could result in 70% of your transactions generating a profit, with an average return of 14.76% per trade.
As Tesla maintains its EV leadership, let’s look at what the Street recommends for its stock.
Is Tesla Share a Buy or Hold?
Per analysts’ consensus estimate, Tesla stock is a Hold. Even though Tesla is in an advantageous position compared to its peers, there’s too much uncertainty regarding TSLA’s margins, noted
Needham analyst Chris Pierce.
In a note to investors dated September 12, Pierce wrote, “TSLA's strategic differentiation vs mass-market OEMs has compressed, with TSLA embracing discounting as a lever.” The analyst has a Hold recommendation on Tesla stock.
Including Pierce,
TSLA stock has received 12 Hold ratings. Further, it has 11 Buy recommendations, while five analysts recommend a Sell. Analysts’ average price target of $270.80 is about 1.3% lower than current levels.
Bottom Line
Tesla’s focus on driving volumes through price cuts could pressure its peers to follow suit, thus affecting their profitability. Moreover, its ICE peers are already grappling with higher costs, making it challenging for them to chip away at Tesla’s market share. Further, Tesla is focusing on reducing the cost of manufacturing and, over time, expects its hardware-related profits to be supported by the acceleration of software-related gains, thus enabling the company to maintain its leadership in the EV space.
However, investors should be cautious as near-term pressure on margins and the year-to-date price gains could keep Tesla stock volatile.
Disclosure
Turkish President Recep Tayyip Erdogan asked Tesla CEO Elon Musk to build a Tesla factory in Turkey, Anadolu Agency posted on social media platform X on Sunday.
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If you're someone who has decided that active investing is the right course of action for you, then obviously, your goal is to find stocks that have the potential to beat the market over the long term. And perhaps no business has historically fit this description better than Tesl
Solar-inverter leader Enphase (NASDAQ: ENPH) has been an all-star stock over the past few years. Looking back just five years, you'll see the stock is up by an astounding 2,820%. That's nearly a 30-bagger.
If you asked Cathie Wood what her favorite stock is, she'd most likely answer that it's Tesla (NASDAQ: TSLA). The electric-vehicle maker easily ranks as the biggest holding among her Ark Invest funds.
If you asked Cathie Wood what her favorite stock is, she'd most likely answer that it's Tesla (NASDAQ: TSLA). The electric-vehicle maker easily ranks as the biggest holding among her Ark Invest funds.
Tesla (NASDAQ: TSLA) stock continues its ascent higher as investors pile into growth stocks and artificial intelligence opportunities. But at its core, Tesla is a play on the energy transition and electric vehicles (EVs) gaining market share over gas-powered alternatives.Tesla is
Tesla (NASDAQ: TSLA) stock continues its ascent higher as investors pile into growth stocks and artificial intelligence opportunities. But at its core, Tesla is a play on the energy transition and electric vehicles (EVs) gaining market share over gas-powered alternatives.Tesla is
One of the most widely followed stocks in the market is Tesla (NASDAQ: TSLA). Its success and future potential have driven Tesla's share price to dizzying heights at times. Even after a correction that slashed the share price by more than half last year, some investors wonder if
Markets continue to trade in a defined range, with the S&P 500 moving between support around 4330 and resistance at 4540. And despite the latest data showing inflation is increasing oil prices, equities are holding steady in that range.
If you’re looking to create a diversified portfolio of equities, it’s hard to beat the
Vanguard Total Stock Market ETF (
NYSEARCA:VTI)
as a starting point. This all-encompassing fund holds positions in over 3,800 stocks. Below, we’ll discuss this popular ETF and the many advantages it offers to investors.
What is VTI ETF’s Strategy?
While there are S&P 500 (
SPX
) ETFs that invest in the 500 stocks that make up the S&P 500 (essentially 500 of the largest companies listed on U.S. exchanges), VTI takes things a step further. It invests in all of the stocks trading on U.S. exchanges, including large-, mid-, and small-cap stocks. This offers investors unparalleled diversification and exposure to the power of the entire U.S. economy and reduces single-stock and single-sector risk.
This
passively-managed index fund is one of the most popular ETFs in the market. With a massive $315 billion in assets under management (AUM), VTI is the fourth-largest ETF in the world.
VTI's Portfolio
VTI holds 3,818 positions. Even better, its top 10 holdings account for just 26% of assets, meaning that there isn't much concentration risk here. Below, you’ll find an overview of
VTI’s top 10 holdings using TipRanks’ holdings tool.
As you can see, VTI’s top 10 holdings are made up of the mega-cap tech stocks that dominate the U.S. market, including Apple (
NASDAQ:AAPL
), Microsoft (
NASDAQ:MSFT
), Amazon (
NASDAQ:AMZN
), Nvidia (
NASDAQ:NVDA
), Alphabet (
NASDAQ:GOOG
) (
NASDAQ:GOOGL
), Tesla (
NASDAQ:TSLA
) and Meta Platforms (
NASDAQ:META
).
Technology is the largest sector of the U.S. stock market, so it’s unsurprising that these tech giants occupy such prominent positions within the fund. Altogether, the technology sector has a 30.1% weighting within the ETF, but there is plenty more to VTI beyond tech. Other substantial segments include the consumer discretionary sector at 14.4%, the industrial sector with a 13.0% share, followed closely by the healthcare sector at 12.6%, and finally, the financial sector accounts for a 10.5% weighting.
Outside of the technology sector, other prominent holdings include the likes of Warren Buffett's Berkshire Hathaway (
NYSE:BRK.B
), health insurer UnitedHealth Group (
NYSE:UNH
), energy majors like ExxonMobil (
NYSE:XOM
) and Chevron (
NYSE:CVX
), and pharmaceutical giants like Johnson & Johnson (
NYSE:JNJ
), Eli Lilly (
NYSE:LLY
), Merck (
NYSE:MRK
), and AbbVie (
NYSE:ABBV
).
Six of VTI's top 10 holdings feature Smart Scores of 8 or above. Meanwhile, VTI earns an Outperform-equivalent ETF Smart Score of 8. The
Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It gives stocks a score from 1 to 10 based on eight market key factors. A score of 8 or above is equivalent to an Outperform rating.
In addition to this strong Smart Score, VTI also enjoys relatively favorable ratings from the analyst community, as you’ll see below.
Is VTI Stock a Buy, According to Analysts?
Turning to Wall Street, VTI earns a Moderate Buy consensus rating based on 2,423 Buys, 1,285 Holds, and 110 Sell ratings assigned in the past three months. The
average VTI stock price target of $258.72 implies 17.1% upside potential.
Looking at Its Long-Term Performance
VTI’s comprehensive approach has helped it build up a solid track record of performance over time. VTI has returned 18.1% year-to-date and 14.8% over the past year. Over the past three years, the fund has returned a respectable 9.7% on an annualized basis.
Further out, VTI has posted double-digit total returns over the past five and 10 years on an annualized basis, with an impressive five-year annualized return of 10.2% and an even better 10-year annualized return of 12.2%.
Since its inception over 20 years ago in 2001, VTI has returned 8.1% on an annualized basis, making this fund a consistent long-term performer.
Looking at these returns on a cumulative basis illustrates the power of investing in a fund like VTI and letting the results compound over the long haul. VTI’s cumulative return over the past 10 years is 215.8%, and its cumulative return since its inception is 465.2%, meaning that an investor who put $100,000 into VTI 10 years ago would have $215,800 today and an investor who put the same amount into VTI when it started in 2001 would have $465,200 today.
Minuscule Fees
Vanguard is the firm that pioneered the idea of low-cost index funds, and VTI is another great example of this tradition. Its miniscule expense ratio of just 0.03% is among the lowest out there and means that an investor allocating $10,000 into VTI today will pay just $3 in fees over the course of the year.
Assuming that the expense ratio remains at 0.03% and VTI returns 5% per year going forward, this investor would pay just $10 in fees after three years, $17 after five years, and $39 after 10 years. These low fees help investors to keep more of the gains they make over time.
This 0.03% expense ratio is also dramatically cheaper than the average expense ratio for similar funds, which stands at 0.79%. Over the course of 10 years, an investor putting the same amount into a fund with a 0.79% expense ratio would pay a whopping $1,184 in fees. This massive difference in total costs over time illustrates why it’s important not to overlook expense ratios when choosing investments and why it’s beneficial to invest in low-cost funds like VTI.
Dividend Track Record
VTI's dividend yield stands at just 1.5%, so most investors aren't buying it for the income. However, this yield is roughly in line with that of the S&P 500, and it helps add to total returns over time. Additionally, VTI has been a reliable dividend payer for many years, with 21 years of consecutive dividend payments under its belt.
Investor Takeaway
VTI’s long-term track record and its broad and comprehensive group of holdings make it a great building block for an investor who is just starting out. The ETF can also be a solid option for longtime investors who simply want to add instant diversification to their portfolios.
The popular ETF’s simple strategy of investing in all stocks listed on U.S. exchanges regardless of size or sector has worked for a long time, and it’s hard to argue with the results. Furthermore, VTI’s minimal fees make it even more attractive.
Disclosure
TipRanks
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