During Tesla Motors Inc (NASDAQ:TSLA)’s annual shareholders’ meeting, CEO Elon Musk expressed his confidence regarding the electric car manufacturer’s future prospects. Of course people consider his conviction to be biased because he is the company’s leader.
Is Tesla really a buy?
Joshua Martin, an analyst at financial start-up I Know First, published an article suggesting that Tesla Motors Inc (NASDAQ:TSLA) is “a great buy and ideal for long-term investors who are willing to accept associated risks” based on his algorithmic predictions (I Know First Daily Market Forecast) for the stock for a one-month, three-months and one-year horizon.
According to Martin, the financial startup uses an advanced self-learning algorithm based on artificial intelligence, or AI, and machine learning. They also incorporate artificial neural networks and genetic algorithms to predict the movement of stocks from three days to one year ahead. Based on his recent algorithmic predictions, Tesla Motors Inc (NASDAQ:TSLA) is one of the top aggressive picks with the strongest signal that it is good for a long position, as illustrated below:
Martin explained that they identify aggressive stock picks by screening their database daily for higher volatility stocks that have recently been strongly moving up and down. According to him, aggressive stocks like Tesla Motors Inc (NASDAQ:TSLA) offer more opportunities but are associated with more risks.
Bullish prediction climbs
The analyst pointed out that Tesla Motors Inc (NASDAQ:TSLA) is a growth stock, so it is more vulnerable to volatility. According to him, his algorithms indicate that confidence in bullish predictions for the stock has climbed. The algorithmic forecast for shares of the electric car manufacture increased from 0.09 on June 9 to 0.31 yesterday. For the one-month horizon, the signal increased from 14.75 on June 9 to 23.10 on June 10, as illustrated below.
“Generally speaking, a predictability of 0.2 or higher is preferable. TSLA remains in a deeper green box in each forecast and time horizon except one, elucidating the bullishness of the market prediction system in Tesla,” said Martin.
The analyst also noted that today’s algorithm is even more confident regarding its bullish prediction for Tesla Motors Inc (NASDAQ:TSLA) because the number is higher. For the three-month horizon, the algorithmic prediction climbed from 0.14 yesterday to 0.36 today.
“These bullish signals should give investors some assurance that TSLA shares will rise further over the stated time-horizons. Algorithmic traders utilize these daily forecasts as a tool to enhance portfolio performance, verify their own analysis and act on market opportunities faster. We never recommend blindly purchasing assets that are endorsed by the algorithm without your own additional analysis,” Martin said.