Tesla Inc (TSLA)

The auto industry is very scary for income players, because there is so much capital being put into it. The company is doing some great stuff that benefits the consumers and the environment, but she likes to see companies become profitable before she becomes interested.

Thinks they are going to have difficulty living up to their production targets they had set out. This is really a long term play on electric cars. Company is not profitable, and yet are looking at acquiring a non-profitable company. She would like to see more visibility as to when they are actually going to start making money.

(Market Call Minute.) The growth is going to be there, but even for him it is a little too rich for his stomach. Without the subsidies you are not making any money on the vehicles right now.

Took a bit of a hit by issuing some shares recently. Expensive and not a name that is going to end up in his portfolios. Trading at 145X forward earnings. Growth rate is forecast at around 70%, but he questions if that growth rate is susceptible to some risks.

(Market Call Minute) Too much risk even for him. It is not a business model that works.

It has been very popular. The concern is whether they can deliver all these orders. There is a question as to how you get them serviced. After sales service is a problem. It tried three or four times to go through resistance. Unless we can make new highs we are stuck within this broad range. Below $200 he would get out.

A high momentum, high growth stock. Just announced a new vehicle. It is at 200 times forward PE and an unknown growth rate going forward. There is a lot of risk to this name.

Trades at a crazy multiple. The issues the company faces are very simple. The car industry is a very capital intensive business. This company has constantly had to do share issues, etc. and dilute shareholders. Have a great product, but they need capacity and to build it out. That is the problem and the bottleneck for them. On valuation you are buying a very expensive stock with a lot of volatility. If you want to trade, you are better to buy it when it falls dramatically and sell it as it goes up.

They produce a great product. From a valuation standpoint in the market, it is extreme, extreme, extreme. For every car they produce, they have a market cap of $222,000. For comparison, General Motors’ (GM-N) market cap per car is $4300. He wouldn’t buy this.

This has suffered a little and dropped below its support level of around $200. We are now back at that level. Wait for it to move a little bit higher.

As a vehicle, it is wonderful and many people own it. Wouldn’t own the stock. Traded at a very high multiple because people thought of it as a technology company. While it is very innovative and a wonderful company, as a stock in this environment it is going to get crushed. It is expensive and trades with an absurd multiple.

You need a high risk tolerance for this stock. Holding one like this for a long period of time is pretty risky, and the stock is extremely expensive. Price momentum has started to fall off and is down about 45% from its recent highs. There are no valuation metrics on this, because they have no cash flows. Purely speculative.

Hated the stock for a long time and is finally seeing some joy. Elon Musk is a visionary and has a confidence to not only blow his billions, but all kinds of other shareholders billions, in order to build an electric car. The electric car is here. The battery is not the issue; the issue is that there is nothing unique about what they do. They started by building a great new car and were out first. But often the 1^st mover is not the winner. Cars are fashion statements and people like to buy them because of the way they look. All the manufacturers are going to come out with electric cars, so it really comes down to style. This company has struggled to make 55,000 cars a year and they make no money on their cars. They are living on tax credits to cover part of their costs. When competition comes out that has a lot of skill in mass scale manufacturing, how can this company possibly get the critical mass they need?

He has owned it since 2012. It will go sideways for now until they come out with the model 3 in 2017/18 and this will compete with BMW (3 series). It has lots of potential.

(A Top Pick Dec 16/14. Up 13.5%.) Everybody has to be careful when you get into these names. This is not just a car company; it is a design, an innovation, a cult. He would be happy to own a little bit of this in a TFSA, and just put it away.