Alcoa Inc (AA)’s Earnings: So What?

Tesla Motors Inc (NASDAQ:TSLA) has gone on an absolute tear this year, and I can’t help but question how long this will continue. However the recent news that its shares (and $14 billion market cap) will be added to the NASDAQ 100, replacing $140 billion Oracle Corporation (NASDAQ:ORCL) as it moves to the NYSE, has just created a significant new market for shares to fill in the ETFs, such as the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ), that track the index. I actually sold a part of my position in Tesla Motors Inc (NASDAQ:TSLA) a few weeks back, thinking that the market had gotten way ahead of itself. However, this new addition, while not fundamentally changing anything about Tesla Motors Inc (NASDAQ:TSLA)’s business or opportunity, means that there is an increased market for its shares, and that could push the share price even higher. Interestingly enough, the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) has actually underperformed the Nasdaq 100 since its inception in 1999, but when dividends are factored in, it has outperformed the index by more than 10%. As compared to the S&P 500, PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) has almost doubled its performance, returning 52% to 28% for the S&P.

Frankly, I’m considering going back into a full position, but it’s worth remembering that this index faces about a 10% turnover of companies every year, so there’s no guarantees that Tesla even stays if it doesn’t perform well as a business. With that said, if you don’t own shares already, you may want to start a small position and watch closely over the coming years and months. The company, with it’s all-aluminum bodied Model S sedan, is revolutionizing the car business in nearly every way, from the car itself to how we buy and maintain it.

Foolish bottom line

The biggest takeaway from the Alcoa Inc (NYSE:AA) earnings report for me was the projected growth in demand for aluminum, and the continued weakness in pricing. Combined, these are just another indicator that the economy will continue to — kicking and screaming, maybe — improve. Add some strong performing companies to the mix, and look at how they are valued with a little context, and decide what fits your investing strategy, and portfolio needs.

The article Alcoa’s Earnings: So What? originally appeared on Fool.com is written by Jason Hall.

Jason Hall owns shares of Ford and Tesla Motors . The Motley Fool recommends Ford and Tesla Motors . The Motley Fool owns shares of Ford, Lockheed Martin, and Tesla Motors . Jason is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.