HYLN

Tesla Is A Net-Cash-Rich, Free-Cash-Flow Generating, Secular-Growth Powerhouse

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Image: Tesla is generating billions and billions of dollars in free cash flow. By Brian Nelson, CFA The cash-based sources of intrinsic value (and the trajectory of growth in them) are the most important considerations when it comes to assessing the attractiveness of an equity. Two of the most important cash-based sources of intrinsic value are net cash on the balance sheet and future expected free cash flows, and in these two areas, Tesla (TSLA) excels. Though we won’t be adding Tesla to any of the newsletter portfolios anytime soon, we like it within a diversified basket of large-cap growth equities, of which the Best Ideas Newsletter in some ways approximates. When Tesla reported its second-quarter 2023 results July 19, … Read more

Tesla Registers Record Total Deliveries in Second Quarter 2023

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Source: Tesla By Brian Nelson, CFA At the start of 2023, Tesla’s (TSLA) price-to-fair value ratio stood at just 0.39, revealing a stock that was severely undervalued and one of the most undervalued stocks in our coverage universe. Shares of Tesla have rocketed higher more than 150% so far in 2023, and while we highlighted it as one of our favorite stocks to start this year, it never made it into the newsletter portfolios. We’re not too worried about that though given how well the newsletter portfolios were positioned with respect to exposure to large cap growth, which, itself, is up more than 35% so far in 2023. On July 2, Tesla noted that it delivered a total of 466,140 … Read more

Stock Markets Still Healthy, Big Cap Tech and Large Cap Growth Safe Havens

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Image Shown: The S&P 500 has been trading above our fair value estimate range (shaded blue area) for some time now. A modest sell-off should be expected. We continue to be bullish on equities for the long run and point to the areas of big cap tech and large cap growth as sources of fundamental and financial resiliency. By Brian Nelson, CFA The S&P 500 (SPY), chart shown above, is trading above our fair value estimate range. The recent sell-off should not be surprising, and it has been predominant in speculative free-cash-flow burning technology stocks, of which we tend to avoid. In January of this year, we “raised” 10%-20% cash in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter … Read more

Tesla Scaling Up Nicely

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Image Shown: Tesla Inc is steadily working towards bringing another manufacturing facility online in the US, this time near Austin, Texas. Image Source: Tesla Inc – Shareholder Letter Covering the First Quarter of 2021 By Callum Turcan Electric vehicle (‘EV’) giant Tesla Inc (TSLA) continues to impress as it smashed past consensus top- and bottom-line estimates when it reported first quarter 2021 earnings on April 26. The company delivered 184,800 vehicles (182,780 Model 3/Y variants and 2,020 Model S/X variants) and produced 180,338 vehicles in the first quarter of this year, though we note that Tesla only produced Model 3/Y variants last quarter and Model S/X vehicle deliveries were met via its inventory. In the first quarter of 2021, Tesla’s … Read more

General Motors Playing Catch Up

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Image: Hummer EV. According to General Motors’ website, the Hummer EV will be a “zero emissions, zero limits all-electric supertruck.” By Brian Nelson, CFA Most of the headlines focused on General Motors (GM) the past couple months had to do with its relationship with flailing electric heavy truck maker Nikola (NKLA). With GM’s executive suite largely distracted from the goings on at Nikola, Tesla (TSLA) has quietly changed the game in the bread-and-butter pickup heavy duty pickup truck market with last year’s launch of the company’s Cybertruck (view the unveil here). Investors will be hearing more about the Cybertruck soon. From our perspective, General Motors is playing catch up. It took Tesla’s successful launch of the Cybertruck in November 2019 … Read more

The Electric Vehicle (EV) Market Is Hot and Getting Hotter

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Image Shown: A look at Tesla Inc’s new Gigafactory factory (Model Y body shop) in Shanghai, China. Image Source: Tesla Inc – Third Quarter of 2020 IR Earnings Presentation By Callum Turcan The electric vehicle (‘EV’) market is hot and getting hotter. Aided by a combination of supportive government policies such as subsides for EVs (purchase tax credits, manufacturing tax credits), plans to ban the sale of automobiles powered by internal combustion engines (‘ICE’) in the coming years, and shifting consumer preferences (households preferring to appear “green”), the long-term outlook for EV sales is quite bright. Tesla Inc (TSLA) is the posterchild of the EV boom given its first-mover advantage, though competitive headwinds are rising. Legacy auto manufacturers are looking … Read more