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Tesla Inc. (TSLA) experienced soaring growth over the past year, dramatically outperforming the S&P 500. The green energy company and electric vehicle manufacturer moved up on the WhaleWisdom Heatmap to a ranking of seventeen from twenty-nine. However, hedge funds and institutions were selling despite Tesla’s remarkable gains in the second quarter. Additionally, the stock has gotten some extra media attention from co-founder Elon Musk on his plans to sell 10% of holdings. Tesla’s stock rose by approximately 1,373.2% as of November 2021, compared to the S&P’s gain of about 51.3% over the past 2-years.

Tesla is a clean energy company well known for its design and manufacture of electric vehicles (EV), battery energy storage, solar energy systems, and related services. The company is led by Elon Musk and periodically collaborates with Musk’s other business ventures, such as SpaceX and the Boring Company. These collaborations offer Tesla unique marketing opportunities and additional revenue. Also, Tesla fared well during the coronavirus pandemic as it continued to see high sales. While Tesla may have to navigate supply-chain challenges because of the pandemic, they continue to see strong interest and demand for EVs and supercharging stations.

Hedge Funds Reduce Shares

In the second quarter of 2021, Tesla’s shares lost traction as hedge funds and institutions decreased shares in their portfolios. The aggregate 13F shares held by hedge funds decreased to about 60.5 million from 63.4 million, a change of approximately 4.6%. Reviewing hedge funds, 33 created new positions, 131 added to an existing holding, 29 exited, and 120 reduced their stakes. Overall, institutions were selling and lowered their aggregate holdings by about 0.8% to approximately 394.5 million from 397.5 million.

(WhaleWisdom)

Favorable Estimates

Analysts estimate that year-over-year increases will bring earnings to $8.36 per share by December 2022, up from December 2021’s predicted $6.14 in earnings. Revenue estimates are also encouraging at approximately $51.2 billion by December 2021 and rising to about $70.6 billion by December 2022. The long-term 13F metrics between 2010 and 2021 demonstrate that Tesla’s investment potential remains on an upward trend.

(WhaleWisdom)

Optimism Amid Stock Sales

Many analysts are reacting to a combination of stock value changes and Musk’s recent announcement about selling 10% of his ownership in Tesla. Musk leveraged social media to conduct a Twitter poll to influence his decision to sell shares, and the highly publicized poll garnered a fair amount of attention. While Musk’s announcement did cause the stock value to dip slightly in November, mainly after he sold about $5 billion in shares, many analysts are optimistic about the stock’s rebound. Bank of America analyst John Murphy kept a neutral rating on the shares and raised his firm’s price target to $1200 from $1000. There’s some expectation that Tesla’s value will increase once Musk completes the sale of 10% of the stock, and so Daniel Ives of Wedbush Securities gave Tesla an Outperform rating and price target of $1,100.

Positive Outlook

Tesla’s impressive growth and analysts’ estimates through 2022 are encouraging. Tesla has brand recognition that continues to be bolstered through its EV segment and Musk’s other businesses endeavors. The company has great appeal with a growing volume of eco-conscious consumers in favor of clean energy alternatives. The stock’s trends suggest a favorable long-term opportunity for investors.

This entry was posted on Monday, November 15th, 2021 at 8:02 am and is filed under Stock. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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