How To Play The Tesla Motors Earnings Announcement [View article]
Terry, you raise some interesting and valid points, but to balance the story I would like to make some counter-arguments:
1) Given the cost of a Model S/Roadster is $50,000-$100,000, the value to Tesla is much higher than the $4000-$8000 per car you mentioned when comparing F and GM. Why? No dealer network with whom to share profits. Also - no legacy UAW pension and healthcare costs. As has been noted elsewhere, TSLA is competing in the high-end space with BMW and Audi - not F and GM. In fact, the absence of a dealer network is further evidence of TSLA's disruptive business model. Auto dealers in Massachusetts were so threatened by this they recently filed a lawsuit to stop them, and lost.
2) Whether TSLA sells 20,000 cars this year or next is irrelevant, frankly. The crucial question is whether they can ramp to a much higher number. Their Fremont, CA plant has the potential to be expanded to 400,000 cars a year in the mid-term. Not all of these cars may be branded as TSLA vehicles, due to recent deal with TM to produce electric Rav 4s. I expect further such deals in the future. A market share of 400,000 electric cars per year is not so much of a stretch - The US and Europe combined sell 25-30 million cars a year. So capturing just 2% of the overall market should be their goal. So using your math: 400,000 cars x $20,000 /car = $8 billion market cap, unrisked and undiscounted.
TSLA may appear overvalued using the metrics you quote. However, TSLA is a growth stock with a disruptive business model. It is essentially a call option on the future of electric cars, electric cars that will be faster and more fun to drive than the Nissan Leaf.
Roughly 70% of those surveyed by Institutional Investorexpect higher stocks in the wake of a Romney victory, with half of those predicting a substantial rally. With an Obama victory, about three quarters expect anything from no move to a big sell-off. SPY +66% since 1/20/2009. [View news story]
GM produces a range of vehicles, some better received than others. So does Toyota - for example, the FJ cruiser is one of the worst rated vehicles on Consumer Reports.
I bought my first GM vehicle earlier this, it drives great and is far more reliable than the Japanese vehicle I used to drive.
Need to separate the politics from the company and its products, which the Forbes article deliberately muddled.
Is this as good as it gets? Two economists contend that because of U.S. demographics and the makeup of the workforce, growth was already slowing and on a weaker course before the 2007 credit event came along - and now the current recovery is already in full bloom. "In other words, the good times are over, and they are not coming back." [View news story]
Why do we even bother listening to economists anymore? Phrenology and astrology have a more successful predictive track record. Just a somewhat cynical thought.
Noble Energy Becomes the Latest 'Victim' of the Shale Gas Ponzi Scheme [View article]
The reason the larger oil companies keep buying shale assets can be summed up in one word: reserves. On a boe (barrel of oil equivalent) basis they are cheap reserves. Profitability is a moot point, unfortunately. The accounting can be rejigged to make it look profitable (a necessary requirement to call a gas resource a "reserve").
If the oil companies can demonstrate to the stock market that they are growing reserves faster than those reserves are being produced, then their stock prices won't be wiped out, i.e. they look like a growth stock. Where have we seen this before?
Investors should be extremely careful and a "show me the money" attitude should prevail. However, having said that, I expect further M&A in the sector as big oil looks to grow reserves despite lack of exploration success.
I don't like government intervention (i.e. bailouts) any more than the next guy. But lets remember a few points here: 1) The bailouts happened... TARP happened - and on whose watch did that $750 billion check get written? (Hint: it wasn't Obama). 2) If you think the Japanese and German auto makers don't receive help from their own governments, then you are deluded.
Italy and Greece rank 69th and 80th on a Corruption Perception Index - not a total surprise since tax evasion and fraud have helped drive the debt crisis. New Zealand is seen as the cleanest, while the U.S. is 24th, behind Qatar. Given the latter's shenanigans in the world of soccer, what does that say about the index? [View news story]
Tech stocks are cheap for multiple reasons, and deservedly so. - Earnings reported are usually non-GAAP, which neglects the impact of highly dilutive executive stock options - Cash on the balance sheet is usually squirreled away in tax havens which cannot be repatriated back into the US without paying high taxes - The possibility of a brainless acquisition is always around the corner, think HP and Palm, or Cisco and Flip, or ... the list goes on
Ford (F) tumbles to nearly the bottom of the annual Consumer Reports survey of vehicle reliability due to flaws in its touch-screen navigation and entertainment system, while Toyota (TM) swept the top three spots. Two years ago, Ford placed in the top 10 with more than 90% of its models being average or better, but this time it fell to 27th of 28 brands surveyed overall. [View news story]
That's exactly what happens when you install MSFT... NOK take heed. GM using a linux/unix based touchscreen system.
Coinstar (CSTR) has resumed trading following its Q1 preannouncement. Shares are currently moving at $71.19, a new all-time high and up 16.3% from today's close. Jim Chanos can't be pleased. [View news story]
Looks like 25.9% of the float sold short, so a pretty crowded trade to begin with
"What's wrong with Exxon Mobil?" While ConocoPhillips and Chevron shares have surged in the past three years, XOM shares have gained just 23%, barely more than BP. It's sheer size may be working against it, James Brumley writes: "Where else can it go to win new customers as well as efficiently develop new production? The answer: not enough places." [View news story]
The answer: exploration success, or rather the complete lack of it at XOM. BP has been very successful (exploration-wise) in the deepwater GOM, and CVX has been very successful in maturing large scale LNG projects in Australia and Angola. XOM's last big idea was to buy XTO and get into shale gas... look at the natural gas price and figure out for yourself if this was a good move. Market cap is not as big a hindrance as mind-set.
Intel (INTC) should pay attention to Microsoft's (MSFT) weak Windows demand, Nomura says, warning the chipmaker's Q1 results "are disconnected with the overall PC market." Firm adds: "This mismatch is unsustainable in our opinion, and ultimately, we see Intel reducing full year guidance for 2011." [View news story]
I just bought a laptop with an Intel CPU and SSD, and it runs Ubuntu Linux. My wife has a MacBook with an Intel CPU. Its not the 1990's anymore - folks need to realize that the Intel - Microsoft correlation is getting weaker and weaker.
I would wait for Consumer Reports to finish their review of the model S before becoming un-hedged. Fisker got a bad review, and now look where they are.
The S&P 500 surged 12% in Q1, after an 11% advance in last year's Q4; so all is well with stocks, right? There's little conviction behind the rally, as investors have yanked ~$15.6B from U.S. equity mutual funds this year while billions of dollars have continued pouring into bond funds, and trading volume is down ~15% Y/Y to the lowest levels since 2007. [View news story]
Investor conviction is usually a lagging indicator, not a leading one (except in the convictions of Allen Stanford and Bernie Madoff...)
How To Play The Tesla Motors Earnings Announcement [View article]
1) Given the cost of a Model S/Roadster is $50,000-$100,000, the value to Tesla is much higher than the $4000-$8000 per car you mentioned when comparing F and GM. Why? No dealer network with whom to share profits. Also - no legacy UAW pension and healthcare costs. As has been noted elsewhere, TSLA is competing in the high-end space with BMW and Audi - not F and GM.
In fact, the absence of a dealer network is further evidence of TSLA's disruptive business model. Auto dealers in Massachusetts were so threatened by this they recently filed a lawsuit to stop them, and lost.
2) Whether TSLA sells 20,000 cars this year or next is irrelevant, frankly. The crucial question is whether they can ramp to a much higher number. Their Fremont, CA plant has the potential to be expanded to 400,000 cars a year in the mid-term. Not all of these cars may be branded as TSLA vehicles, due to recent deal with TM to produce electric Rav 4s. I expect further such deals in the future.
A market share of 400,000 electric cars per year is not so much of a stretch - The US and Europe combined sell 25-30 million cars a year. So capturing just 2% of the overall market should be their goal.
So using your math: 400,000 cars x $20,000 /car = $8 billion market cap, unrisked and undiscounted.
TSLA may appear overvalued using the metrics you quote. However, TSLA is a growth stock with a disruptive business model. It is essentially a call option on the future of electric cars, electric cars that will be faster and more fun to drive than the Nissan Leaf.
Roughly 70% of those surveyed by Institutional Investor expect higher stocks in the wake of a Romney victory, with half of those predicting a substantial rally. With an Obama victory, about three quarters expect anything from no move to a big sell-off. SPY +66% since 1/20/2009. [View news story]
Forbes Is Wrong About GM [View article]
So does Toyota - for example, the FJ cruiser is one of the worst rated vehicles on Consumer Reports.
I bought my first GM vehicle earlier this, it drives great and is far more reliable than the Japanese vehicle I used to drive.
Need to separate the politics from the company and its products, which the Forbes article deliberately muddled.
Is this as good as it gets? Two economists contend that because of U.S. demographics and the makeup of the workforce, growth was already slowing and on a weaker course before the 2007 credit event came along - and now the current recovery is already in full bloom. "In other words, the good times are over, and they are not coming back." [View news story]
Just a somewhat cynical thought.
Noble Energy Becomes the Latest 'Victim' of the Shale Gas Ponzi Scheme [View article]
If the oil companies can demonstrate to the stock market that they are growing reserves faster than those reserves are being produced, then their stock prices won't be wiped out, i.e. they look like a growth stock. Where have we seen this before?
Investors should be extremely careful and a "show me the money" attitude should prevail. However, having said that, I expect further M&A in the sector as big oil looks to grow reserves despite lack of exploration success.
Forbes Is Wrong About GM [View article]
1) The bailouts happened... TARP happened - and on whose watch did that $750 billion check get written? (Hint: it wasn't Obama).
2) If you think the Japanese and German auto makers don't receive help from their own governments, then you are deluded.
Italy and Greece rank 69th and 80th on a Corruption Perception Index - not a total surprise since tax evasion and fraud have helped drive the debt crisis. New Zealand is seen as the cleanest, while the U.S. is 24th, behind Qatar. Given the latter's shenanigans in the world of soccer, what does that say about the index? [View news story]
Tech Stocks Are Dirt Cheap [View article]
- Earnings reported are usually non-GAAP, which neglects the impact of highly dilutive executive stock options
- Cash on the balance sheet is usually squirreled away in tax havens which cannot be repatriated back into the US without paying high taxes
- The possibility of a brainless acquisition is always around the corner, think HP and Palm, or Cisco and Flip, or ... the list goes on
Ford (F) tumbles to nearly the bottom of the annual Consumer Reports survey of vehicle reliability due to flaws in its touch-screen navigation and entertainment system, while Toyota (TM) swept the top three spots. Two years ago, Ford placed in the top 10 with more than 90% of its models being average or better, but this time it fell to 27th of 28 brands surveyed overall. [View news story]
Coinstar (CSTR) has resumed trading following its Q1 preannouncement. Shares are currently moving at $71.19, a new all-time high and up 16.3% from today's close. Jim Chanos can't be pleased. [View news story]
"What's wrong with Exxon Mobil?" While ConocoPhillips and Chevron shares have surged in the past three years, XOM shares have gained just 23%, barely more than BP. It's sheer size may be working against it, James Brumley writes: "Where else can it go to win new customers as well as efficiently develop new production? The answer: not enough places." [View news story]
BP has been very successful (exploration-wise) in the deepwater GOM, and CVX has been very successful in maturing large scale LNG projects in Australia and Angola.
XOM's last big idea was to buy XTO and get into shale gas... look at the natural gas price and figure out for yourself if this was a good move.
Market cap is not as big a hindrance as mind-set.
Intel (INTC) should pay attention to Microsoft's (MSFT) weak Windows demand, Nomura says, warning the chipmaker's Q1 results "are disconnected with the overall PC market." Firm adds: "This mismatch is unsustainable in our opinion, and ultimately, we see Intel reducing full year guidance for 2011." [View news story]
Its not the 1990's anymore - folks need to realize that the Intel - Microsoft correlation is getting weaker and weaker.
Tesla Motors: A Perfect Hedge [View article]
2 Stocks To Buy, 2 Stocks To Sell, And What's Next For The Market [View article]
The S&P 500 surged 12% in Q1, after an 11% advance in last year's Q4; so all is well with stocks, right? There's little conviction behind the rally, as investors have yanked ~$15.6B from U.S. equity mutual funds this year while billions of dollars have continued pouring into bond funds, and trading volume is down ~15% Y/Y to the lowest levels since 2007. [View news story]