Seeking Alpha

Consumer stocks not immune to momentum blowoff

  • Shares of Green Mountain Coffee Roasters (GMCR -5.4%), Tesla Motors(TSLA -4.2%) and Chipotle (CMG -3.4%) are getting wrapped up in a momentum selloff.
  • SA contributor Bill Maurer has the breakdown on which beat-up momo names are offering the biggest discount off their 52-week highs today.
Comments (19)
  • Frank Greenhalgh
    , contributor
    Comments (1268) | Send Message
     
    Reality is setting in. You can't sell in any quantities without advertising. Tesla is showing this with weak sales.
    http://bit.ly/1djiuVX
    24 Mar, 02:41 PM Reply Like
  • Tri Duong
    , contributor
    Comments (1454) | Send Message
     
    Did you read your own article link?

     

    It specifically says the currency exchange was the difference. Basically, Tesla was charging the same price because it is made and sold in US currency. Those customers are paying in Euros. They are paying less but Tesla is getting the same amount.

     

    That's what I called effective marketing. Now Tesla is a trusted brand that doesn't screw over their customer for a little extra profit. No wonder why Europeans are willing to wait over a year to get their Model S.
    24 Mar, 02:47 PM Reply Like
  • civ-e
    , contributor
    Comments (316) | Send Message
     
    why would you spend extra money on advertising if you're already selling every unit you can produce.
    24 Mar, 03:22 PM Reply Like
  • David RG
    , contributor
    Comments (1027) | Send Message
     
    Do you really believe that?
    24 Mar, 05:44 PM Reply Like
  • Ford Prefect 1969
    , contributor
    Comments (2282) | Send Message
     
    @David RG

     

    "Do you really believe that?"

     

    Of course.

     

    It is stated clearly in official guidance.

     

    Yammering of some hapless and desperate bears and shorts is white noise and FUD. You don't really believe that the market cares about the Santos theory of guidance denial do you?
    25 Mar, 08:28 AM Reply Like
  • David RG
    , contributor
    Comments (1027) | Send Message
     
    You are gullible Ford if you think that a company is consistently "capacity constrained" and if only they could ramp up production, sales would be so much higher.

     

    You know full well that sales are rather tepid right now in several European countries and also that there are no partners lining up for the 'giga' factory investment.

     

    Any market with excess demand over supply will attract capital like crazy, and yet Tesla just cannot catch up? This is really a myth, but it allows Tesla to carefully manage revenue and earnings expectations on this stock that REQUIRES an assumption that they will eventually sell 600-700 thousand vehicles, or about 25 times what they are selling now.

     

    So any hiccup in revenue ramp would destroy the stock. Hence "we could have sold more" if only we had been able to make them line.
    25 Mar, 03:21 PM Reply Like
  • Ford Prefect 1969
    , contributor
    Comments (2282) | Send Message
     
    @fgrindle

     

    What is the point of repeating something that has been fundamentally debunked?

     

    All I am seeing is that the shorts do not have a leg to stand on.

     

    Enjoy the media hiatus and get ready for the next squeeze.
    24 Mar, 02:49 PM Reply Like
  • infinite1
    , contributor
    Comments (45) | Send Message
     
    love the spin Ford. Sales are weak, that is good news? Be prepared to call Tesla up again and tell them there are more really bad people out there saying not nice things about their cars. Wahhhhhhhhh!
    24 Mar, 03:26 PM Reply Like
  • Ford Prefect 1969
    , contributor
    Comments (2282) | Send Message
     
    @infinite1

     

    What?
    25 Mar, 08:31 AM Reply Like
  • BraxtonComer
    , contributor
    Comments (109) | Send Message
     
    If you play your cards right "momentum Blowoff's" aren't necessarily a bad thing. You can buy cheap. In the cases of Tesla, they still have some room to drop, I think.
    24 Mar, 02:49 PM Reply Like
  • Ford Prefect 1969
    , contributor
    Comments (2282) | Send Message
     
    @BraxtonComer

     

    No - that was the gap filled in the late teens.

     

    Message to the shorts: Cry me a river 'cos elevator is on its way up again.
    24 Mar, 02:56 PM Reply Like
  • BraxtonComer
    , contributor
    Comments (109) | Send Message
     
    I purchased long term put options, and got scared and sold and did make some money. I don't see the New Jersey dealership issue being a big issue at all. The reason I thought long term put options might be a good idea, is because once the cars they sold last year start accumulating significant millage, if something goes wrong with those cars (and that battery doesn't have as long of a life as some may have hoped), Tesla is in deep cr$p. GM has enough cars on the road where even a major recall like they had, can be absorbed by the company and they can pay several hundred million dollars and fix the problem and still make a profit. Tesla on the other hand, would get destroyed if they had a major recall, because they only have one car.
    24 Mar, 05:07 PM Reply Like
  • Ford Prefect 1969
    , contributor
    Comments (2282) | Send Message
     
    @BraxtonComer

     

    I think the market has had enough of GM absorbing several hundred millions of dollars due to poor products and worse management.

     

    By comparison to GM, Tesla is a professional organisation with bright and capable management with far more experience in running a successful business than the current management of GM.

     

    GM's CEO seems like a weak corporate functionary and she is a few months on the job at the outside. The whole management team can be no more than 5 years old considering the last team presided over GM's bankruptcy.

     

    There is zero purpose in spreading FUD about Tesla's batteries, these people actually know what they are doing.
    25 Mar, 08:39 AM Reply Like
  • BraxtonComer
    , contributor
    Comments (109) | Send Message
     
    Ford, I'm not saying the large auto makers are perfectly managed companies, but I'm not spreading FUD about batteries either. Those batteries are very expensive, and if for some reason they don't last as long as some might have hoped, there is going to be a very big issue there. Batteries are a big issue. Some argue that Tesla is a huge breakthrough because they don't have as complex engines and transmissions as ICE vehicles, but ICE vehicles don't have battery's that cost more than an engine and transmission combined. We all have a pretty good idea of what will happen to ice vehicles that have been on the road for over 100,000 miles, we do not yet have a large sample size of cars that are using Tesla's technology that have accumulated significant millage. I personally think that is a major risk investors should consider.

     

    I think you make a lot of great points and agree with a lot of what you say. It is my personality to view both sides of an issue, even if I am invested in a stock. I'm brutally honest, and there are plenty of major risk factors for Tesla. Just read their financial statements under risk factors, they are all listed. There is a lot of risk involved with Tesla.
    25 Mar, 07:15 PM Reply Like
  • Mattster
    , contributor
    Comments (162) | Send Message
     
    Momos reversed the very day Cramer had a show recommending viewers to buy every momo stock a few weeks ago. How long will people fall for his scam? Just because he is a nice guy and on TV? He has no credibility left.
    24 Mar, 02:56 PM Reply Like
  • haaggus
    , contributor
    Comments (68) | Send Message
     
    Tesla investors like myself care not for 2014 sales. The supercharger network is still in its very early stages right now. Tesla will become a household name when the supercharger network starts to expand and embed itself into American life. Besides, most people still haven't gotten back into stocks since 2008. The trust isn't there yet.

     

    Let the market create a solid floor and people will start buying stocks.
    24 Mar, 03:01 PM Reply Like
  • Doc's Trading
    , contributor
    Comments (623) | Send Message
     
    technical update..... As predicted on the high day, (When the stock reached 265) TSLA has filled its non-traded gap at 118 today. I believe it now is a trading buy for a very short term move from the 110 to 115 level for a two to three day move only. A stop placed below the low made today at 110 is essential. This stop can be moved higher if the stock resists selling.
    Selling weekly out of the money 2 1/2 point spread puts is a safer and perhaps equally rewarding play. Risk is defined as well as is the gain. If the rally is accompanied by lighter volume than made today (11,300.000) expect a retest of the lows. Selling out of the money call spreads, after a three day rally is also an option that should prove rewarding.
    .........more later
    24 Mar, 04:19 PM Reply Like
  • Ford Prefect 1969
    , contributor
    Comments (2282) | Send Message
     
    Correct.

     

    If we get to see $210 again that would be incredible second chance for those who missed it on Monday. I am not that hopeful.

     

    $218 - that was the buy in signal on technicals.

     

    Worth noting that this is a news hiatus. I suspect Musk is involved in gigafactory negotiations and is distracted with a life-goal level of attention to launch preparations for the reusable Falcon 9.1 on the 30th March. The business has not stopped generating progress in the background by any means and any update is likely to build strength.
    25 Mar, 08:44 AM Reply Like
  • Frank Greenhalgh
    , contributor
    Comments (1268) | Send Message
     
    Musk still hasn't even decided what state the factory will be built in and how friendly it will be for reproducible energy. Still no commitment from Panasonic. This could really drive the stock down.
    25 Mar, 12:50 PM Reply Like
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