Zacks Investment Ideas feature highlights: Tesla, Apple and Rivian | Canada News Media
Connect with us

Investment

Zacks Investment Ideas feature highlights: Tesla, Apple and Rivian

Published

 on

For Immediate Release

Chicago, IL – December 15, 2023 – Today, Zacks Investment Ideas feature highlights Tesla TSLA, Apple AAPL and Rivian RIVN.

Why Tesla’s Cheap (2024 Outlook)

An Up and Down Year for Tesla

Tesla is the undisputed market leader in battery-powered electric car sales in the United States, enjoying roughly a 70% market share. Over the years, Tesla has shifted from developing niche products for affluent buyers to more affordable EVs for the masses. The firm’s three-pronged business model approach of direct sales, servicing, and charging sets it apart from other carmakers. Year-to-date, shares are higher by 128%. However, investor concerns are mounting, including:

· Valuation: The EV king’s market capitalization is more than the combined value of all legacy automakers.

· Underperformance: Though Tesla has more than doubled this year, it has underperformed the market and “Magnificent 7” recently.

· Recall: This week, news broke that Tesla must recall more than 2 million vehicles.

Below, I will debunk the most common investor concerns and lay out my bull case for the stock:

Don’t Judge a Book By its Cover: Tesla Valuation is Cheap

The price-to-book ratio (P/B ratio) is a financial metric that compares a company’s market value (its stock price) to its book value (the net value of its assets minus liabilities). P/B is calculated by dividing the market price per share by the book value per share.

A low P/B ratio may suggest that a stock is undervalued, while a high ratio may indicate overvaluation. Investors use this ratio to assess a company’s relative worth in the market compared to its accounting value. Tesla currently has a book value of 14.03. Compare that to another mainstream stock like Apple, whose book value is 49.54, and Tesla suddenly looks cheap.

Furthermore, it is essential to remember that Wall Street is a discounting device. Over the past twelve years, Tesla has achieved a stunning compound annual growth rate (CAGR) of 72%, earning its premium above slower-growing legacy automakers.

Rallying on Negative Recall News

Earlier this week, Tesla was forced to recall over two million vehicles over autopilot safety concerns. As I always like to remind investors, the reaction to negative news supersedes the news itself. In the case of TSLA, the stock shook off the bad news and is green for the week.

Technical “Shakeout” and Price Rotation Higher

Savvy investors understand that price movement is the ultimate arbiter of decisions, because after all, price is the only thing that pays. TSLA shares sliced below the 50-day moving average on the recall news and then ripped higher. Such price action indicates a shakeout, where weak hands get stopped out of their positions, clearing the way for the next move higher. Now, TSLA is triggering a bullish swing trade signal by clearing last week’s highs.

Cybertruck Hype Real

Many Tesla bears suggest that the hype around Tesla’s Cybertruck is unfounded. However, Google Trends data suggests the opposite is true. As Tesla investor and enthusiast Sawyer Merritt points out, “Tesla has surpassed Ford to become the most searched auto brand in the US. Tesla’s gone from not making the rankings at all in 2022 to second place in 2023, with 29 of 155 countries listing Tesla as their #1 car brand in Google Trends.”

Competition Not a Threat

Thus far, all of the fully-EV focused automakers like Rivian have yet to achieve a quarterly profit. As Elon Musk points out, it’s one thing to create a prototype and a whole other thing to manufacture at scale. Meanwhile, Ford, the only other profitable EV maker in the US, announced that it would cut F-150 Lightning production in half next year. (the Lightning is seen by the market as the biggest threat to the Cybertruck)

China Sales Growing Despite Weak Economy

Despite a floundering Chinese economy, recent registration numbers suggest that Tesla is on pace to break its quarterly record for deliveries in China (156.7k).

Exponential EV Growth is on the Horizon

A recent study suggests that by 2030, two-thirds of all global car sales will be EVs.

Bottom Line

Investors using traditional valuation metrics to value Tesla are likely to be wrong. Tesla’s price-to-book ratio reveals an undervalued position compared to other mainstream stocks. Meanwhile, the Cybertruck’s rising popularity and Tesla’s sustained growth in China further underscore its market strength. As the automotive landscape continues to evolve towards electric vehicles, Tesla’s innovative approach and global expansion prospects make it a must-own.

Why Haven’t You Looked at Zacks’ Top Stocks?

Since 2000, our top stock-picking strategies have blown away the S&P’s +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.

See Stocks Free >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.

Source link

Continue Reading

Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

 on

 

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

 on

 

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

S&P/TSX composite little changed in late-morning trading, U.S. stock markets down

Published

 on

 

TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.

The S&P/TSX composite index was up 0.05 of a point at 24,224.95.

In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.

The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.

The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.

The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.

This report by The Canadian Press was first published Oct. 10, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

Source link

Continue Reading

Trending

Exit mobile version