Tesla Inc (TSLA)

(Top Pick Sep 4/13, Up 49.07%) Sold it after making a bit of money. It was just after three cars blew up. They are going to revolutionize the car industry. He is not against buying speculatively.

This is a tough one. He wouldn’t be Short the stock right now, even though valuations are through the roof. They produce as many cars right now in a year as General Motors (GM-N) produces in a day, and yet the stocks are valued at the same level. This is the future of automobiles, so how willing are you to pay up on a valuation basis to own this right now. They have generated some profits now, but if you start pulling away the subsidies and government grants, they are clearly not profitable. Thinks that people are going to be willing to pay up for a long time for the potential that they have.

For him, this is too much of a concept story, and too highly valued. This is a stock where you either believe things are going to pan out the way the company thinks, or you don’t believe. This is a car company that created an awesome sports sedan that happens to be electric. Electric cars have proven to be a very tough business.

Would put this in the category of almost like a concept. Generally speaking, the electric car market is going to become more competitive. This one is clearly the early mover and the leader, but there is a lot of optimism baked into the valuation. Company has a $26 billion market cap and expected to sell 35,000 cars next year which comes out to about a $750,000 valuation per car.

He tried to understand the battery. Once you get over the function of how they finance the battery plant, it is interesting. Trading at about 12 times revenue and they are a long, long way away from making money. The profitability of an electric car is also a function of the cost of power to put into it. As you start to adopt new technology such as Nat Gas or electricity, the price of the technology falls. At these kinds of prices it is pretty lofty.

Move today has nothing to do with the company. Great company, great future, but trades at a high multiple.

It seems to be working out. They are direct sellers of cars. He favours this one. Beautiful cars. It is speculative.

He really hopes this company succeeds. Driving electric cars is a fabulous idea. This company manufactures about 30,000 cars each year while GM sells about 3 million cars a year. The company is trading at 1,118X forward earnings. You have to remember that there is a difference between a terrific company and a terrific stock. (See Top Picks.)

Would buy the car before the stock. It is a company that values each car as a million dollars yet cars sell for $90k. It has to grow into the stock price. Be on the sidelines for now.

A fantastic story. A trailblazer. But you know what happens with the pioneers. Those are the guys with the arrows in their backs. Trades at a forward multiple of about 117 times. The margins that it is targeting is 25% and to get this, they would have to ramp up production by more than 15 fold and keep margins at just in the 12% range just to touch the current valuation. Grossly overvalued.

Tremendous cars. Interesting design for a car if you don’t need to travel 600 miles. Scores high in consumer reviews. It is a concept story. You have to believe they will be a number 4 car maker and it is possible. The problem is that it is a great story that is growing quickly but you could give back a quarter of your investment very quickly (volatility). They will have challenges moving into the numbers that everyone has in mind for them.

Probably a great car. It is an exciting concept but at its current stock price and its current market cap, each car is valued at $800,000 per car produced, as compared to $11,000 for Ford (F-N). This is a momentum stock and he would steer clear of it.

This is not the type of stock, he buys. Priced for perfection. Trading at 238X forward earnings.

He has never shorted a company in his life, but if he had one to do, it would be this one. For every car they produce, they have $800,000 of market cap, compared to Ford (F-N) which is $20,000. You have to distinguish between good companies and good stocks.

(Market Call Minute) 22 Billion market valuation and 20,000 cars produced this year so million dollars in valuation per car produced.