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James Li
James Li
Articles (1538) 

Tesla Veers Off Course on S&P 500 Index Snub

Index committee adds 3 names, but bypasses EV giant

Shares of Tesla Inc. (NASDAQ:TSLA) nosedived over 21% on Tuesday on the Standard & Poor's 500 Index committee's decision to dismiss the company from inclusion in the index.

Instead of the Palo Alto, California-based electric vehicle giant, Etsy Inc. (NASDAQ:ETSY), Teradyne Inc. (NASDAQ:TER) and Catalent Inc. (NYSE:CTLT) received their invites into the index according to the S&P Dow Jones Indices press release from Sept. 4.

Markets continue post-Labor Day slide, driven by Tesla and Big Tech

The tech-heavy Nasdaq Composite closed at 10,847.69, down 465.44 points or 4.11% points from last Friday's close of 11,313.14.


Tesla shares closed at $330.21, down 21.06% from the previous close of $418.32 on its S&P 500 snub despite "widespread speculation" that the company would be added according to CNBC. Investors had expected Tesla to be included in the index following its June-quarter profit, its fourth consecutive quarterly profit based on generally accepted accounting principles.


Tech stocks added to the decline as investors continued taking profits from Big Tech companies, continuing the selloff from late last week. According to the Aggregated Portfolio of Gurus, a Premium feature of GuruFocus, broadest-owned guru stocks like Microsoft Corp. (NASDAQ:MSFT) and Facebook Inc. (NASDAQ:FB) had over 20 guru sells during the second quarter.


Etsy operates a marketplace platform in which sellers list handmade and vintage products directly. According to GuruFocus, the Brooklyn, New York-based company's profit margins and returns are outperforming over 92% of global competitors, suggesting good profitability.


Gurus with large holdings in Etsy include Jim Simons (Trades, Portfolio)' Renaissance Technologies and Steven Cohen (Trades, Portfolio)'s Point72 Asset Management.



Teradyne designs and develops automatic test systems for use in semiconductors, wireless products and electronics. GuruFocus ranks the North Reading, Massachusetts-based company's financial strength and profitability 8 out of 10 on several positive investing signs, which include a strong Altman Z-score of 7 and profit margins and returns that outperform over 92% of global competitors.



Catalent focuses on advanced delivery technology and development solutions for drugs, biologics and consumer health products. GuruFocus ranks the Somerset, New Jersey-based company's profitability 6 out of 10: Operating margins are outperforming over 69% of global competitors despite returns outperforming just over 58% of global drug manufacturers.


See also

Tesla remains the most-voted stock in the "Not Interested" virtual basket: As of Tuesday, 23 GuruFocus users dismissed the EV giant as a potential investment.


According to GuruFocus, Tesla's price valuations are underperforming over 97% of global competitors, suggesting significant overvaluation. The GuruFocus Value Line shows that Tesla's share price is "off the charts," significantly above the dark-red zone.

Disclosure: No positions.

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