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Tesla (NASDAQ:TSLA) had a great year in 2013, returning 335% to shareholders as the stock soared.

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Tesla went into the year targeting 20,000 vehicle sales and will end the year beating that number by a bit. For 2014, Tesla is looking to sell 40,000 cars.

If Tesla can sell 40,000 vehicles in 2014, it should have a profitable year. My crude model shows it earning close to $100 million.

Tesla has had no trouble finding buyers for its vehicles. Supply of batteries has limited its ability to meet demand. Tesla may just build its own lithium ion battery plant to ease that constraint.

Part of the sales growth may come from the recently unveiled Model X SUV Tesla plans to introduce in 2014. Like its sedan counterpart, the Model X is a gorgeous design.

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If Tesla can build the cars, I have no doubt they will sell them.

The issue with Tesla is a combination of investor sentiment and market value. Today the company is valued at $18 billion. Even if it earns $100 million or so, it will still have an eye-popping 180 times earnings valuation. Make that 100 times if you buy into most analysts' estimates that it will earn $1.50 a share this year, according to data published by Yahoo.com Finance.

I think Tesla will not only make its sales figures but blow through them. A lot of factors are tailwinds for Tesla.

  1. Charging infrastructure is building out quickly in key markets
  2. Tesla's new model X will be in showrooms this year and it plans a $40,000 model for 2015 introduction.
  3. Tesla has already become a top seller in foreign markets like Norway where it was the hottest selling car in October 2013.
  4. Battery technology is improving
  5. The Tesla brand is now a household name
  6. Tesla has entered the China market
  7. The designs are gorgeous

While the stock is rich, it is worth holding. Rather than buy the stock at $149 a share, I plan to write the June 2014 $130 puts for a premium of about $15.00. If I am "put" to I will be long the stock at $115. If not, I get to keep the $15.00 premium and take another look.

Source: Tesla Remains A Buy