Why Tesla Shares Are Trading Higher By Around 11%; Here Are 20 Stocks Moving Premarket

The iShares MSCI USA Value Factor ETF (VLUE) made its debut on 04/16/2013, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.

What Are Smart Beta ETFs?

The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.

Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

The fund is sponsored by Blackrock. It has amassed assets over $7.05 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. Before fees and expenses, VLUE seeks to match the performance of the MSCI USA Enhanced Value Index.

The MSCI USA Enhanced Value Index is based on a traditional market capitalization-weighted parent index, the MSCI USA Index which includes U.S. large and mid capitalization stocks.

Cost & Other Expenses

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.

Operating expenses on an annual basis are 0.15% for VLUE, making it one of the least expensive products in the space.

VLUE's 12-month trailing dividend yield is 2.55%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Representing 29.70% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.

When you look at individual holdings, Cisco Systems Inc (CSCO) accounts for about 6.04% of the fund's total assets, followed by At&t Inc (T) and International Business Machines Co (IBM).

The top 10 holdings account for about 34.92% of total assets under management.

Performance and Risk

So far this year, VLUE has gained about 10.12%, and is up about 28.62% in the last one year (as of 10/24/2024). During this past 52-week period, the fund has traded between $85.95 and $111.14.

VLUE has a beta of 1.01 and standard deviation of 17.45% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 153 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares MSCI USA Value Factor ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.

Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $63.01 billion in assets, Vanguard Value ETF has $129.15 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

Zacks Investment Research

December S&P 500 E-Mini futures (ESZ24) are up +0.46%, and December Nasdaq 100 E-Mini futures (NQZ24) are up +0.72% this morning as risk sentiment got a boost after Tesla posted its biggest quarterly profit in over a year, while investors geared up for U.S. business activity data and the next round of corporate earnings reports.

Tesla surged over +10% in pre-market trading after the electric vehicle maker reported stronger-than-expected Q3 adjusted EPS and said it expects “slight growth” in vehicle deliveries this year and a big jump in 2025.

In yesterday’s trading session, Wall Street’s major indices closed in the red. Enphase Energy plunged about -15% and was the top percentage loser on the S&P 500 after the solar equipment maker posted downbeat Q3 results and provided below-consensus Q4 revenue guidance. Also, Arm slumped more than -6% and was the top percentage loser on the Nasdaq 100 following a Bloomberg report that the company canceled a license that allowed Qualcomm to use its intellectual property to design chips. In addition, McDonald’s slid over -5% and was the top percentage loser on the Dow after the U.S. Centers for Disease Control and Prevention said that a severe E. coli outbreak linked to the company’s Quarter Pounders sickened dozens of people in the U.S. On the bullish side, Northern Trust climbed more than +7% and was the top percentage gainer on the S&P 500 after posting upbeat Q3 results. Also, Texas Instruments advanced over +4% and was the top percentage gainer on the Nasdaq 100 after the semiconductor company reported better-than-expected Q3 results.

“This is about price exhaustion, this is about election exhaustion, it’s about campaign exhaustion, it’s about Fed exhaustion, it’s about policy exhaustion, it’s about geopolitical exhaustion,” said Kenny Polcari at SlateStone Wealth. “It’s about how stocks are stretched and it’s about the need for stocks to retreat, test lower, shake the branches, see who falls out, and then move on.”

Economic data released on Wednesday showed that U.S. existing home sales unexpectedly fell -1.0% m/m to an almost 14-year low of 3.84M in September, weaker than expectations of 3.88M.

Meanwhile, the Federal Reserve said Wednesday in its Beige Book survey of regional business contacts that economic activity was little changed in most parts of the U.S. since early September. Over half of the Fed’s 12 districts reported “slight or modest” growth in employment, while most districts said that prices increased at a “slight or modest pace.” Multiple districts also reported a slowdown in wage growth. “Reports on consumer spending were mixed, with some districts noting shifts in the composition of purchases, mostly toward less expensive alternatives,” according to the Beige Book.

U.S. rate futures have priced in a 92.9% chance of a 25 basis point rate cut and a 7.1% chance of no rate change at the November FOMC meeting.

On the earnings front, notable companies like United Parcel Service , Honeywell International , Union Pacific , Keurig Dr Pepper , L3Harris Technologies , Tractor Supply , Southwest Airlines , and American Airlines are scheduled to release their quarterly results today. According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +4.3% increase in quarterly earnings for Q3 compared to the previous year, down from +7.9% growth projected in mid-July.

On the economic data front, all eyes are focused on the U.S. S&P Global Manufacturing PMI preliminary reading, which is set to be released in a couple of hours. Economists, on average, forecast that the October Manufacturing PMI will come in at 47.5, compared to last month’s value of 47.3.

Also, investors will focus on the U.S. S&P Global Services PMI, which arrived at 55.2 in September. Economists foresee the preliminary October figure to be 55.0.

U.S. New Home Sales data will come in today. Economists foresee this figure to stand at 719K in September, compared to 716K in August.

U.S. Initial Jobless Claims data will be reported today as well. Economists estimate this figure to be 243K, compared to last week’s number of 241K.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.197%, down -1.11%.

The Euro Stoxx 50 futures are up +0.68% this morning as investors digested another batch of corporate earnings reports and preliminary PMI data from the region. Travel and leisure stocks led the gains on Thursday. A survey released on Thursday showed that Eurozone business activity stalled again in October, remaining in contraction territory due to a drop in domestic and foreign demand, despite firms barely raising their prices. Meanwhile, European Central Bank Governing Council member Robert Holzmann stated that the ECB will probably cut interest rates by another 25 basis points this year despite lingering upside risks to inflation. “I’d say a quarter-point step is probable in December. A bigger half-point cut is unlikely though not impossible. But we might also conclude that preemptively cutting in October might have been sufficient to take a break in December,” he told Bloomberg in an interview. Also, ECB policymaker Bostjan Vasle stated that the central bank should continue to lower interest rates in “measured” steps. In corporate news, Hermes rose about +2% after the French company reported a substantial increase in Q3 sales. Also, Barclays gained more than +3% after the British lender posted better-than-expected Q3 results. At the same time, Michelin slumped over -6% after the French tire maker slashed its annual sales volume forecast.

France’s Manufacturing PMI (preliminary), France’s Services PMI (preliminary), Germany’s Manufacturing PMI (preliminary), Germany’s Services PMI (preliminary), Eurozone’s Manufacturing PMI (preliminary), Eurozone’s Composite PMI (preliminary), and Eurozone’s Services PMI (preliminary) data were released today.

The French October Manufacturing PMI arrived at 44.5, weaker than expectations of 44.9.

The French October Services PMI was at 48.3, weaker than expectations of 49.8.

The German October Manufacturing PMI stood at 42.6, stronger than expectations of 40.7.

The German October Services PMI arrived at 51.4, stronger than expectations of 50.6.

Eurozone October Manufacturing PMI came in at 45.9, stronger than expectations of 45.1.

Eurozone October Composite PMI has been reported at 49.7, weaker than expectations of 49.8.

Eurozone October Services PMI arrived at 51.2, weaker than expectations of 51.5.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.68% and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.10%.

China’s Shanghai Composite Index closed lower today, ending a four-day rally as the impending U.S. presidential election left investors wary of a possible escalation in Sino-U.S. tensions. Solar and pharmaceutical stocks led the declines on Thursday. Investors and analysts noted that increasing expectations of a potential second Donald Trump presidency and the threat of higher trade tariffs weighed on sentiment. Investors also awaited additional policy signals from Beijing following the implementation of a series of stimulus measures. Meanwhile, the standing committee of the National People’s Congress is set to convene in the coming weeks to discuss issues such as government spending and sovereign bond sales. Beijing vowed to “significantly increase” debt earlier this month to boost its faltering economy but left investors wondering about the total size of the package. At the same time, Daiwa said in a note that upcoming fiscal support from Chinese policymakers for the property sector might fall short, as likely only 30%-40% of the quota for local government special bonds for the property sector is expected to be used for purchasing excess housing stock, which could be insufficient for stabilizing the market. In corporate news, Guangzhou Shiyuan Electronic Technology slid over -6% after reporting a 5.1% year-over-year decline in Q3 attributable profit to 435.5 million yuan.

Japan’s Nikkei 225 Stock Index closed marginally higher today, reversing earlier losses due to potential position adjustments. Healthcare and technology stocks gained ground on Thursday. Still, a cautious sentiment prevailed as investors awaited Japan’s general election and a slew of corporate earnings reports. Polls indicated that the ruling Liberal Democratic Party and its coalition partner Komeito might lose their majority in the October 27th election. A private-sector survey released Thursday showed that Japan’s factory activity declined for the fourth consecutive month in October due to subdued demand and weak orders, while services activity contracted for the first time in four months. Meanwhile, Japan’s Finance Minister Katsunobu Kato pledged to monitor the recent yen weakening more carefully, describing the movements as rapid and one-sided. “The government will carefully monitor the developments in the currency market, including speculative moves while increasing the sense of urgency further,” Kato said. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed flat at 27.80.

The Japanese October au Jibun Bank Japan Manufacturing PMI (preliminary) arrived at 49.0, weaker than expectations of 49.9.

Pre-Market U.S. Stock Movers

Tesla surged over +10% in pre-market trading after the electric vehicle maker reported stronger-than-expected Q3 adjusted EPS and said it expects “slight growth” in vehicle deliveries this year and a big jump in 2025.

Lam Research climbed more than +6% in pre-market trading after the chip equipment maker posted upbeat Q1 results and issued solid Q2 revenue guidance.

International Business Machines slid more than -4% in pre-market trading after reporting weaker-than-expected Q3 revenue.

Boeing fell over -2% in pre-market trading after the airplane maker’s factory workers rejected a new labor contract.

Today’s U.S. Earnings Spotlight: Thursday - October 24th

S&P Global (SPGI), Union Pacific (UNP), Honeywell (HON), KKR & Co (KKR), United Parcel Service (UPS), Northrop Grumman (NOC), Carrier Global (CARR), Arthur J Gallagher (AJG), Capital One Financial (COF), Digital (DLR), Keurig Dr Pepper (KDP), L3Harris Technologies (LHX), Nasdaq Inc (NDAQ), Valero Energy (VLO), Edwards Lifesciences (EW), Dow (DOW), Hartford (HIG), ResMed (RMD), Tractor Supply (TSCO), DexCom (DXCM), DTE Energy (DTE), Dover (DOV), Teck Resources B (TECK), Deckers Outdoor (DECK), Weyerhaeuser (WY), Western Digital (WDC), Cincinnati Financial (CINF), Carlisle (CSL), Rogers Communications (RCI), Principal Financial (PFG), West Pharmaceutical Services (WST), Labcorp Holdings (LH), SS&Cs (SSNC), Southwest Airlines (LUV), VeriSign (VRSN), Healthpeak Properties (DOC), Textron (TXT), Reliance Steel&Aluminum (RS), Universal Health Services (UHS), Comfort Systems (FIX), Gaming & Leisure Properties (GLPI), Pool (POOL), Texas Roadhouse (TXRH), AptarGroup (ATR), TechnipFMC (FTI), Kinsale Capital (KNSL), LKQ (LKQ), Hasbro (HAS), Mohawk Industries (MHK), Skechers (SKX), Old Republic (ORI), Wex (WEX), Applied Industrial Technologies (AIT), American Airlines (AAL), FirstService (FSV), FTI Consulting (FCN), Carpenter Technology (CRS), SPS Commerce (SPSC), Appfolio Inc (APPF), TAL Education (TAL), ADT (ADT), Ryder System (R), Darling Ingredients (DAR), Nov (NOV), Lear (LEA), Boyd Gaming (BYD), Columbia Banking (COLB), Exponent (EXPO), CNX Resources (CNX), Olin (OLN), Life Time Holdings (LTH), Glacier (GBCI), Brunswick (BC), Virtu Financial Inc (VIRT), Phillips Edison Co (PECO), Cousins Properties (CUZ), Valley National (VLY), Harley-Davidson (HOG), MSC Industrial Direct (MSM), Euronet (EEFT), AllianceBernstein Holding LP (AB), Ameris (ABCB), Integer Hld (ITGR), TRI Pointe Homes (TPH), Boston Beer (SAM), Eastern Bankshares (EBC), Associated Banc-Corp (ASB), First Interstate BancSystem (FIBK), Simply Good Foods (SMPL), Aeroportuario del Centro Norte (OMAB), Federated Investors B (FHI), WSFS (WSFS), The Bancorp (TBBK), McGrath (MGRC), Bread Financial Holdings (BFH), Ardagh Metal Packaging (AMBP), Pacific Premier (PPBI), Minerals Technologies (MTX), Visteon (VC), First Financial Bancorp (FFBC), OSI Systems (OSIS), Seacoast Banking Florida (SBCF), First Merchants (FRME), Tronox (TROX).

On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.