Tesla Motors Inc Attracts Value Investor Ron Baron

Tesla Motors Inc Attracts Value Investor Ron Baron
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Analysts and investors tend to run hot or cold on Tesla Motors Inc (NASDAQ:TSLA). Usually the more value-oriented investors like Ron Baron wouldn’t touch a stock like Tesla because it remains a speculative play. However, Baron Funds actually bought into Tesla during the March quarter, according to the firm’s March 31, 2014 quarterly report.

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Tesla position initiated

In his quarterly letter, Baron said he initiated a position in Tesla Motors Inc (NASDAQ:TSLA) as well as athenahealth, Inc (NASDAQ:ATHN). He believes both companies have “unique competitive advantages and become substantially larger over time.”

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Baron analyst Gilad Shany wrote a short synopsis of why they’re bullish on Tesla Motors Inc (NASDAQ:TSLA), noting that the automaker owns proprietary technology and that it is building the gigafactory so that it can increase its battery capacity. He believes that gigafactory gives the automaker a competitive advantage that manufacturers of traditional cars don’t have. In fact, he thinks makers of traditional vehicles will have a difficult time overcoming this advantage.

Tesla to expand rapidly

Shany sides with the extreme bulls on Tesla Motors Inc (NASDAQ:TSLA), saying he thinks demand for the automaker’s cars could hit 500,000 a year by 2020. He noted Tesla’s plan to build a $35,000 electric car and launch it in 2017 and indicates that it could be a big contributing factor to the automaker’s growth. In fact, he believes that after hitting demand for 500,000 vehicles in 2020, demand will be “several times that amount in following years.”

The value investing firm places a lot of stock in Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk, noting that he has been tied to numerous disruptive companies. Musk made his fortune through PayPal, and now in addition to Tesla, he’s also involve with SolarCity Corp (NASDAQ:SCTY) and SpaceX. Baron Funds holds the view that Musk will “lead the transformation of the auto industry from its ICE [internal combustion engine] age to the dot.com era.”

Baron promised to write more about Tesla Motors Inc (NASDAQ:TSLA) in future letters and simply closed out the brief synopsis on the automaker by saying it’s clear that traditional automakers and car dealers hate Tesla. In fact, oil companies and unions hate Tesla too. Consumers are the only ones who like Tesla, and Baron Funds does too, apparently.

Shares of Tesla Motors Inc (NASDAQ:TSLA) rose more than 2% today, closing out the regular trading hours at $199.45 per share.

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@valuewalk.com.
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  1. Ron Baron is brilliant. Now he will sell as this dumb money drives the stock higher. Great time to buy deep puts. Higher Suckers!

  2. So we have an important person who thinks that there is VALUE in tsla…..After 2 years of reading people right here in SA telling the longs (previously known as the Bulls) that there is no value in tsla we need someone like this guy to tell us that there is VALUE in tsla…….What a surprise !

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