What does it mean for Tesla Motors Inc (NASDAQ:TSLA) to really be Wall Street’s next Apple Inc. (NASDAQ:AAPL)? Most would agree that it’s about the automaker’s ability to disrupt its own industry and probably adjacent industries. Already Tesla shares have been on an incredible tear, and some investors may be ready to get out. However, in spite of how much money they have raised on Tesla, Marketocracy found three big bulls who are in the company for the long term.
Writing on Forbes, Ken Kam wrote a follow-up to a piece written by his colleague. After collecting comments from their “investment research community, he highlighted three extensive comments which caught his attention. He noted that all three of them have long track records with Marketocracy and have gained hundreds of thousands of dollars by investing in Tesla Motors Inc (NASDAQ:TSLA).
A decade ago, no one talked about tail risk hedge funds, which were a minuscule niche of the market. However, today many large investors, including pension funds and other institutions, have mandates that require the inclusion of tail risk protection. In a recent interview with ValueWalk, Kris Sidial of tail risk fund Ambrus Group, a Read More
Investing in Tesla for five to ten years
First, he mentions Thomas Benthke, who has gained $488,000 on his Tesla Motors Inc (NASDAQ:TSLA) investment. He notes that the automaker has been able to disrupt an industry which previously seemed impervious to disruption. He gives the credit for that to Tesla CEO Elon Musk. He believes Musk made a list of the main problems with electric cars and then combined that list with the worst parts of owning a car. Then he seems to have focused on providing a solution for all of those problems—all rolled up ino one.
He disagrees with critics who believe that other automakers will easily be able to compete with Tesla Motors Inc (NASDAQ:TSLA) by releasing their own EVs. He cites problems like “corporate culture, politics, and existing ties,” plus the “extensive” research and development which is required to make an appealing electric vehicle.
He invested in Tesla Motors Inc (NASDAQ:TSLA) with a five- to ten-year time frame. He expects the company to be worth more within that time frame than it is today. If Tesla does as well as he believes it will, he expects its value to soar to more than $100 billion within that time frame. That’s about four times its current valuation. He sees all of the short interest in Tesla as being shortsighted and intensifying the explosive upside moves we’ve seen in the automaker’s shares. He believes that if investors wait for a company to establish value, they’ll never see an opportunity to establish a position in that company.
What sets Tesla apart
Mitch Roider has gained $368,000 on Tesla Motors Inc (NASDAQ:TSLA), and he says there are four big reasons he believes in the automaker’s future. He cites its “‘just in time’ manufacturing,” “direct sales channel,” “customer support through updates and the supercharger network” and the company’s “modular battery and motor design.
He states that all four of those things sets Tesla Motors Inc (NASDAQ:TSLA) apart from other automakers, making the company a difficult act to follow. He said Tesla has a 18 to 36 month lead over the competition in terms of technology.
He thinks that by 2016, Tesla Motors Inc (NASDAQ:TSLA) will be selling its $35,000 car with a 200 to 250-mile range, which, when combined with the supercharger network, would make it possible to drive the car across the country. He predicts that at that point, Tesla will go from making between 20,000 and 30,000 cars a year to more than 150,000 cars a year. He also believes Tesla’s value will be about four times what it is now.
Better places to spend U.S. money
The final comments come from Wayne Dalhke, who gained $441,000 from Tesla Motors Inc (NASDAQ:TSLA). He lists three main factors. First, he says electric vehicles provide a solution to the U.S. dependency on oil, which is crucial because many OPEC nations don’t like the U.S. particularly but love the fact that we depend on them for oil.
He also said he bought Tesla Motors Inc (NASDAQ:TSLA) in his “virtual portfolio” in August 2012 for $30 a share. At that time, he sensed that the automaker would be worth far more than that. And third, he again pointed to Elon Musk as being a key differentiator at Tesla. He also cited “potential for growth and future research.”
He again said he believes Tesla Motors Inc (NASDAQ:TSLA) will become a mass market automaker and, as others do, believes that the company will not only disrupt the auto industry, both other industries as well.