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Value Horizon

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  • Why Investors In Tesla, Netflix, And Amazon Have A Rough Five Years Ahead [View article]
    "The most optimistic five-year forecasts for the company anticipate that Tesla could be making $5.65 per share in 2019."

    you say that based on what? your survey of yourself and... who exactly?

    here's a link to NASDAQ's website showing the AVERAGE estimate for 2017 is $6.84, with the high 2017 estimate being $11.34. yet you say the most optimistic estimate two years later in 2019 is $5.65? Timothy, you can question whether their estimates make sense, but it does not make sense to claim that their estimates are a fraction of what one can easily verify them to be.

    http://bit.ly/RkXrZA

    here is Doughtery's analyst Andrea James projecting eps of $15, when Tesla hits 500K units per year, which the most bullish analysts see in 2020. these comments from James are from last summer when her Tesla price target was $200. Her target now is over $300.

    http://bloom.bg/1eJ0yiR-Ahrc~~i~QBq~a~CqiG4Jy...
    Apr 15 03:39 AM | 10 Likes Like |Link to Comment
  • Tesla - 20 Key Risks That Longs Are Ignoring [View article]
    so lucky, it's pretty clear why we look at Tesla so differently.

    you see them delivering 120K Gen III vehicles in 2020, is see them delivering 3X as many, and remaining supply constrained. supply constrained by a very side margin (think global demand several times larger than what they can deliver at that point).

    we shall see.
    Apr 12 08:50 PM | Likes Like |Link to Comment
  • Tesla - 20 Key Risks That Longs Are Ignoring [View article]
    nicely done, you nailed it happyflying :)

    my current valuation is $240. I generally think of it more like $210-$270 because $240 implies precision that is simply not there, but the $240 is what I use to determine the $180 buy in price as a 1/3 off sale (I'll be up 33% if I buy in at $180 and it reaches my fair value estimate).

    I continually monitor and tweak this based on my changing valuation of the company. the same applies to when I would look at reducing my position, 1/3 over my fair value estimate is when I'd start taking a hard look at some some selling; that is $320. $180-$320 is hold territory for me. my friends and relatives who call me on big up days and down days, with "what do we do?" have heard that many times... "$180-$320 we hold, under $180 we consider buying, over $320 we consider selling" (of course the specific numbers have changed with my changing valuation).

    couple of notes:

    1. it's not completely mechanical... I'll actually start buying trading shares if we dip into the 190s... but I'll do so in a small way to ensure my average buy in is $180 if there's a fall to say $170. likewise, I'd probably start nibbling with some selling at $310.

    2. holding out to 1/3 over my fair valuation is not my typical play. it's because Tesla is such a long term story, with a potential for a continuing stream of opportunity. I sold Celgene in 2007 when it hit my fair value, I did not wait for a 1/3 premium. they've done well since then, but it wasn't particularly obvious that they would. I think it's likely in 2018 and 2024 there will continue to quite a nice value horizon for Tesla; that is unusually visible long term outperform probability.
    Apr 11 07:34 PM | 4 Likes Like |Link to Comment
  • Tesla - 20 Key Risks That Longs Are Ignoring [View article]
    very well, so lucky,

    so your numbers mean,

    vehicle deliveries up a little over 50% in 2015 over 2014, a bit under 50% the following year, one flat year as you assume a year's delay in Gen III, than vehicles deliveries up again 50% in 2018.

    and, Gen III vehicle deliveries for 2019, 2020, 2021, what do you see?
    Apr 11 06:11 PM | Likes Like |Link to Comment
  • Tesla - 20 Key Risks That Longs Are Ignoring [View article]
    BRB, I already advised taking Goldman Sachs with quite the grain of salt and waiting for some kind of verification before taking their remarks to heart... other than trying to falsely imply that I was taking Goldman at face value, I'm not sure what the point of your comment was.
    Apr 11 12:36 PM | Likes Like |Link to Comment
  • Tesla - 20 Key Risks That Longs Are Ignoring [View article]
    BRB,

    30 million shares in the next 10 years, you say, only, and call it crazy talk. how many shares do you see them issuing in the next 10 years?
    Apr 11 12:33 PM | Likes Like |Link to Comment
  • Tesla - 20 Key Risks That Longs Are Ignoring [View article]
    okay, so if I get this right, you see S+X volumes growing from 23K in 2013 to 80K in 2016 where you see them leveling off.

    2017 is Tesla's target for Gen III sales to begin. where exactly is that multi-year gap of no growth you were suggesting?

    I wouldn't disagree that Gen III might be delayed a year, but 2017 is the base case. and if there were a delay, the stock would trend down, but correct up if they get back on track the next year.
    Apr 11 12:29 PM | Likes Like |Link to Comment
  • Tesla - 20 Key Risks That Longs Are Ignoring [View article]
    solucky, so what year do you see the reaching 80K/year S+X?
    Apr 11 09:49 AM | Likes Like |Link to Comment
  • Tesla - 20 Key Risks That Longs Are Ignoring [View article]
    @portatopia,

    as you see in my comment, I'm not making any changes in my valuation without something direct from Tesla (or from multiple sources), so, yes, I agree, Goldman Sachs statements not to be taken without quite the grain of salt.

    as to funding, reasonable question, will they have enough to get another factory and GF made in 4 years. would likely tally $5 billion plus, or $8 billion plus if they don't have partners funding GF #2. I think they will earn roughly $3 billion over the next 4 years. those retained earnings, loans, another secondary of 5 million shares, or "out there" source, i.e., Larry Page acting on his past suggestions of Elon's enterprises being the best philanthropic destination for his money... we shall see.
    Apr 10 11:59 PM | Likes Like |Link to Comment
  • Tesla - 20 Key Risks That Longs Are Ignoring [View article]
    @MarketLost,

    see below re timing of next auto factory and Gigafactory. 1st I've heard of it, not direct from Tesla, so sure I'm not exactly changing my valuation on this... but contends that Tesla is looking to do this way sooner than I'd thought!

    "Analysts at Goldman Sachs met with Tesla Motors (NASDAQ: TSLA [FREE Stock Trend Analysis]) executives in Chicago and Denver on April 8 and 9...

    exciting future

    Tesla's management believes that it will need to build a new assembly plant and gigafactory within the next four years, either in Europe or Asia."

    http://bit.ly/1gdVsf9):
    Apr 10 11:34 PM | 1 Like Like |Link to Comment
  • Tesla - 20 Key Risks That Longs Are Ignoring [View article]
    very good. You see 500K vehicles/year by 2021 as a 30-40% likelihood, I see it as an 80% likelihood. Clearly that's a substantial driver of our different valuations.

    as to margins. I agree, Tesla will not see the net margins Apple has the past few years, 20+% based on a quick search I just did. I see Tesla with net margins of 10% on the Gen III vehicle, and 12.5% on the Model S/X, thus overall rounds to 11%. Is this in the range you foresee BRB?
    Apr 10 10:21 PM | 1 Like Like |Link to Comment
  • Tesla - 20 Key Risks That Longs Are Ignoring [View article]
    @Market,

    1. you raised the question of future factories in regard to the 30 pe I used. of course, the timing of any future factories is speculative. the main point is that I think it is extremely probable that it a 2021 Tesla building 500K vehicles per year will be clearly aiming to continue growing several fold. as we see now, there will be those in 2021 that will debate whether their growth goals can be executed, but I find it highly probable that it will be full steam ahead for Tesla, not "gee, it's nice to have a little niche, let's keep it at that." I think enough of the market will find their future execution probable to deliver a pe of 30, possibly 40 (assuming typical market conditions, higher pe in a bull market, lower in a bear market).

    2. I've seen execution slip as much as a year or two with Tesla. That's why my strong execution scenario builds in an extra year. if it's an extra two rather than one years, I'm okay with that... stock worth say $450 in 2022 vs. 2021, I will be okay with the investment. fwiw, missing model S numbers, was about a two month slip... far better to get the product out right than slip. as to SuperChargers, as far as I can see they are on track.

    fwiw, if your buy in point is $150 vs. my $180, it seems our valuations are not very far apart at all.
    Apr 10 07:58 PM | Likes Like |Link to Comment
  • Tesla - 20 Key Risks That Longs Are Ignoring [View article]
    10%

    fwiw, I should have mentioned in my last comment, that while I don't see the dilution reaching 170 million shares for 10 years, I use that full projected dilution when I calculate 2021 eps.
    Apr 10 05:57 PM | Likes Like |Link to Comment
  • Tesla - 20 Key Risks That Longs Are Ignoring [View article]
    BRB,

    so, to describe that in terms of percentages, you think there is under a 50% chance Tesla reaches 500K vehicles/year by 2021. do you have a more specific percentage chance you see this happening than under 50% that I can work with? a range is fine.
    Apr 10 05:46 PM | Likes Like |Link to Comment
  • Tesla - 20 Key Risks That Longs Are Ignoring [View article]
    Marketlost, I've been studying Tesla intensely a month shy of two years (there is a story to why I know the date so well and it has every bit to do with my value investing perspective you picked up on). Thus, I have indeed, incorporated the points you raised. here are the specifics:

    1. Number of Shares: beyond 140 million, I see an increase of another 30 million shares between now and 2024.

    2. Another Factory: yes, again and again... initially I see 5 years from hitting 500K vehicles/year, to 2nd factory up at full capacity, but as they continue to grow, the factories will come more rapidly with more earnings and better access to loans.

    3. Risk: as I mentioned, I look at scenarios based on successful execution and stumbling. that is part of my risk adjustment. the second part is that I only buy when a stock I see value in is on sale (fwiw, Tesla is the second stock in the past 15 years I saw enough value on the horizon to buy). I would only recommend or buy myself at a 30% discount to what I see as fair value. currently that discounted buying area starts under $180. I'm holding here.
    Apr 10 05:39 PM | Likes Like |Link to Comment
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