Dear Reader,
There are tons of news and analyses about Tesla and its future possibilities and intrinsic value. Recently, even Morgan Stanley's research analysts expressed doubts whether Tesla would hit its production targets. And Morgan Stanley research analysts have long been proponents of Tesla.
So what is Tesla's intrinsic value? Basically, it seems it is a binary outcome. One of the many sources for Tesla's financials is https://finance.yahoo.com/quote/TSLA/financials?p=TSLA&.tsrc=fin-srch-v1
On the positive side Tesla's has managed to also quadruple its revenue from 3.2 bln. USD to 11.8 bln. USD since end year 2014 to end year 2017. And this is the main reason investors keep funding Tesla - Tesla exhibits very fast growth. The logical argument is that as the revenue keeps growing, Tesla would become highly profitable and investors would be able to multiply their money with dividends and the rising stock price. Until recently the price of Tesla's stock did really rise a lot.
The problem? Tesla's loss increased almost sevenfold from 294 million USD in 2014 to 1.96 billion in 2017 end year financials. Basically, nearly 2 billion USD loss is a staggering amount. Why is Tesla's future value a binary outcome? Basically, if Tesla achieves its production targets for Model 3, the company may even become profitable. If not, the company could go under.
What is my opinion on Tesla's valuation. Basically, it all depends whether the market for electric vehicles takes off. So far, it hasn't. Yes, there are orders, but I do not see many Tesla's on the streets of Europe. If you see a Tesla, it is a rarity and you check it out with curiousity. In my personal opinion, so far the market for electric vehicles is a no starter. Electric cars are just too expensive to produce. They contain too much ferrous metals, which cost a fortune.
Elon Musk seems to have underestimated how hard is to manufacture cars. Tesla's costs just keep going up. Musk says much of the costs are for research and development. Tesla has to achieve a technological breakthrough, otherwise the company would remain loss making.
In short what is my estimate of Tesla's intrinsic value. Tesla's current market capitalization is 53.85 billion USD. I think Tesla should be trading at a market capitalization of 20 billion USD at the moment.
Disclaimer:
The blogposts and comments on this blog and posts on social
networks(Twitter, LinkedIn etc.) are not investment recommendation,
are provided solely for informational purposes, and do not constitute an
offer or solicitation to buy or sell any securities. The opinions
expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!
Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Kind regards,
Petar Posledovich
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Disclaimer:
Disclaimer: The blog posts and comments on this blog and posts on social networks are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".
The blog is stocks analysis and valuation, Bitcoin, Cryptocurrencies, Artificial Intelligence, AI, deep-learning focused. Independent, unbiased AI insights.
Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blog posts on this blog and posts on social networks.
Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blog post and posts on social networks!
The blog is property of Wolfteam Ltd. www.wolfteamedge.com
Respectfully yours,
Petar Posledovich
Sunday, July 22, 2018
What is Tesla's Intrinsic Value?
LinkedIn Bio:
https://www.linkedin.com/in/petar-posledovich-5236123/
I recently worked for almost 3 years as a Senior Expert at United Bulgarian Bank AD, part of KBC Group solely doing Market and Counterparty Risk. Before that I worked for 2.5 years as Chief Expert, Market and Counterparty Risk in DSK Bank, part of OTP Bank.
I have interned for 2.5 months with Deutsche Bank AG, worked for 8 months as Market and Counterparty Risk Manager at ING Wholesale Banking and for 1.4 years as Investment Associate at Unicredit Bulbank AD, Bulgaria.
Since November 2010 until July 2017, I was a Research Analyst at the Bulgarian National Bank, where I analyzed financial markets for managing Bulgaria's foreign currency reserves in an efficient manner.
I hold a Master of Science in Applied Mathematics(Financial Mathematics) and BA in Economics from Sofia University 'St. Kliment Ohridski'
I have done 1.5 year of graduate studies at the University of Constance, Germany and Erazmus academic exchange year studies at the Friedrich Alexander University of Erlangen-Nuremberg, Germany.
I am a Licensed Investment Consultant by the Bulgarian Financial Supervision Commission
Sunday, July 8, 2018
Warren Buffett's Investment Portfolio - A Humble Analysis!
Dear Reader,
The Investment Portfolio of Warren Buffett can be seen from numerous sites, but the one on http://warrenbuffettstockportfolio.com/ seems most obvious.
Apple constitutes 40 bln. USD or 21.27% of Buffett's investment portfolio. Wells Fargo, Bank of America, Kraft Heinz and Coca Cola constitute 12.7%, 10.8%, 10.7% and 9.2% of Buffett's investment portfolio. American Express makes up another 7.48%.
According to various reports, in the last 20 years or so Warren Buffett's investment portfolio beat the S&P 500 Index by 2-3% year. Although this performance is not enough to make for a hedge fund fee structure to be viable, it is still a remarkable achievement.
The main themes in Buffett's investment portfolio are consumer discretionary and staples and banks(financials). Consumer discretionary and staples(Apple, Heinz, Coca Cola) make up around 40%. Banks and Financials make another circa 40%. The other holdings are quite diversified. The main theme is Warren Buffett's famous 'Margin of Safety' value. He has invested in large capitalization companies, many are mega cap like Apple, Wells Fargo, Bank of America and Coca Cola.
His main belief: to quote Master Buffett himself - 'Never bet against America'. That said, there is another implicit belief - that the stock market will always go up , at least in the long-term. Has the US stock market went up all the time in the long-run. Not in the Great Depression, it hasn't. That is when Benjamin Graham harnessed his investment prowess, learned a lot and wrote afterwords his famous book 'The Intelligent Investor" which Buffett's defines as his investment thesis.
Buffett's investment in Apple which is for 40 bln. USD and constitutes circa 21% of his portfolio is an interesting case. Buffett's has famously resented investing in technology stocks. He did not invest in technology stocks in the Dot Com boom and this turned out to be a prescient call. Nasdaq tanked heavily and Buffett's thesis was vindicated. Recently Buffett invested in IBM without much success. He sold out of IBM completely recently without making a high return. Personally, I see a problem in his large concentrated position in Apple. Apple has fallen more than 30% twice recently, the fall in 2012 exceeded 40% even. Buffett's has been quoted that the shares of Berkshire Hathaway have fallen more than 50% on at least four occasions. But if Apple falls more than 40%, Buffett's investment porfolio track record of beating S&P 500 will be in jeopardy. Apple's market capitalization is far less than 20% of the S&P 500. Apple could fall a lot driven by many factors as the end of the smartphone boom and market saturation and end of the latest technology boom.
But even if Buffett's Apple investment tarnishes his investment track record, he will still remain an investments master. I have long marveled at his investment prowess.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!
Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Kind regards,
Petar Posledovich
The Investment Portfolio of Warren Buffett can be seen from numerous sites, but the one on http://warrenbuffettstockportfolio.com/ seems most obvious.
Apple constitutes 40 bln. USD or 21.27% of Buffett's investment portfolio. Wells Fargo, Bank of America, Kraft Heinz and Coca Cola constitute 12.7%, 10.8%, 10.7% and 9.2% of Buffett's investment portfolio. American Express makes up another 7.48%.
According to various reports, in the last 20 years or so Warren Buffett's investment portfolio beat the S&P 500 Index by 2-3% year. Although this performance is not enough to make for a hedge fund fee structure to be viable, it is still a remarkable achievement.
The main themes in Buffett's investment portfolio are consumer discretionary and staples and banks(financials). Consumer discretionary and staples(Apple, Heinz, Coca Cola) make up around 40%. Banks and Financials make another circa 40%. The other holdings are quite diversified. The main theme is Warren Buffett's famous 'Margin of Safety' value. He has invested in large capitalization companies, many are mega cap like Apple, Wells Fargo, Bank of America and Coca Cola.
His main belief: to quote Master Buffett himself - 'Never bet against America'. That said, there is another implicit belief - that the stock market will always go up , at least in the long-term. Has the US stock market went up all the time in the long-run. Not in the Great Depression, it hasn't. That is when Benjamin Graham harnessed his investment prowess, learned a lot and wrote afterwords his famous book 'The Intelligent Investor" which Buffett's defines as his investment thesis.
Buffett's investment in Apple which is for 40 bln. USD and constitutes circa 21% of his portfolio is an interesting case. Buffett's has famously resented investing in technology stocks. He did not invest in technology stocks in the Dot Com boom and this turned out to be a prescient call. Nasdaq tanked heavily and Buffett's thesis was vindicated. Recently Buffett invested in IBM without much success. He sold out of IBM completely recently without making a high return. Personally, I see a problem in his large concentrated position in Apple. Apple has fallen more than 30% twice recently, the fall in 2012 exceeded 40% even. Buffett's has been quoted that the shares of Berkshire Hathaway have fallen more than 50% on at least four occasions. But if Apple falls more than 40%, Buffett's investment porfolio track record of beating S&P 500 will be in jeopardy. Apple's market capitalization is far less than 20% of the S&P 500. Apple could fall a lot driven by many factors as the end of the smartphone boom and market saturation and end of the latest technology boom.
But even if Buffett's Apple investment tarnishes his investment track record, he will still remain an investments master. I have long marveled at his investment prowess.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!
Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Kind regards,
Petar Posledovich
LinkedIn Bio:
https://www.linkedin.com/in/petar-posledovich-5236123/
I recently worked for almost 3 years as a Senior Expert at United Bulgarian Bank AD, part of KBC Group solely doing Market and Counterparty Risk. Before that I worked for 2.5 years as Chief Expert, Market and Counterparty Risk in DSK Bank, part of OTP Bank.
I have interned for 2.5 months with Deutsche Bank AG, worked for 8 months as Market and Counterparty Risk Manager at ING Wholesale Banking and for 1.4 years as Investment Associate at Unicredit Bulbank AD, Bulgaria.
Since November 2010 until July 2017, I was a Research Analyst at the Bulgarian National Bank, where I analyzed financial markets for managing Bulgaria's foreign currency reserves in an efficient manner.
I hold a Master of Science in Applied Mathematics(Financial Mathematics) and BA in Economics from Sofia University 'St. Kliment Ohridski'
I have done 1.5 year of graduate studies at the University of Constance, Germany and Erazmus academic exchange year studies at the Friedrich Alexander University of Erlangen-Nuremberg, Germany.
I am a Licensed Investment Consultant by the Bulgarian Financial Supervision Commission
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