Stock Analysis: Tesla Motors (TSLA)

Stock Price: 198.23 [as of Feb 14, 2013]

Market Cap: 24.3 billion  [as of Feb 14, 2013]

For context: GM’s market cap is 57.1 billion

What is it?

Tesla Motors is a groundbreaking car manufacturer that makes EVs powered solely by lithium-ion batteries. Its Model S has a range of up to 480 km and a top speed of 210 km/h *. It is an American start-up and is especially notable for its stock price increase of over 400% in 2013.

Its Model S:

Yays:

  1. Tesla’s Model S was given the title of “Safest Car Ever Tested” by the National Highway Traffic Safety Administration in 2013, shattering safety records.
  2. Tesla has sold cars in all 50 U.S. states, and has officially launched sales in Asia and Europe (the Netherlands loves Tesla), with more stores to open in 2014.
  3. There is no lack of demand for Tesla. It really says something about a car company when instead of advertising and getting more people interested in buying, what they need to do is make more cars to satisfy all the people that would like to buy. This has created the bizarre situation of used Tesla cars being sold on the market at a higher price than new ones. Don’t believe me? Check out this article here.
  4. Tesla is not satisfied with just maintaining the status quo. It is looking to expand its product line as well as its production capabilities. Currently in the works is the Model X (all-electric SUV) and according to CEO Elon Musk, a vehicle that will be at a lower price-point. This means there is a lot of room for expansion and the entire automobile industry is its oyster.

Nays:

  1. In October, Tesla stocks plunged because of car fires and people questioning the safety of the Model S. Musk himself addressed the situation and assured shareholders as well as the general public that he had confidence in the safety of the Model S. None of the drivers were hurt. This did not stop the media storm that followed, since many are still questioning this new technology. (Unfortunately, leading up to the release of Q4 earnings, there has been yet another Tesla Model S fire, details can be found here.)
  2. A large portion of Tesla Motor’s revenue formerly came from the sales of zero-emission credits. The sale of such credits contributed a lot to its first-ever profit in the first quarter of 2013. Unfortunately, due to regulatory changes by the California Air Resources Board, they will likely not be making as much revenue as they expected from this particular source.
  3. Tesla Motors has enjoyed relatively little competition so far. However, GM announced that it is beginning R&D for an EV as well, one that will be able to sell at a lower price point and have a similar range to the Model S *. I would not be surprised if other car companies jumped on the bandwagon sooner rather than later, seeing Tesla’s success.

Conclusion: I believe that at this point Tesla Motors is going into a price that buyers need to beware of (even if it manages amazing earnings this quarter). This is especially true for short-term investors. In the long term, I think Tesla is a company with massive potential. As for whether it will continue to outperform expectations, that has yet to be seen. Its swift expansion gives room for hope. However, potential/current investors would do well to remember that Tesla’s large success has much to do with it having an innovative product that was never seen before on the market. The novelty may wear off as other companies begin to seize this opportunity as well.

Still, I have faith in this amazing company that is driving like none have driven before (haha). The reason that Tesla is trading more like a tech stock than like a car company stock is because it offers innovative technology that could change not only the transportation industry, but the world as we know it.

Tesla’s earnings for the quarter ending December 31, 2013 will be coming out on February 19th.

Added Note: This just in, Tela’s Q4 earnings for 2013 were AWESOME!

Disclosure: I have no position on the stock mentioned, and am in no way a trading professional. I still have much to learn and this is only a little practice exercise for me in stock research. Please do not take this as serious investing advice.

Choosing Queen’s Commerce

Figuring out where to go after high school can sometimes be a real cause for headache. Here is a rundown of my decision process, which may be helpful to those still deciding.

1) Area of Study

Obviously, somebody interested in Biology would be looking at different schools than somebody studying Music. Around the end of Grade 10, I decided that I was going to go into the field of business. This narrowed the schools I was looking at considerably. In my research, I learned that Queen’s Commerce is one of the top business schools in Canada. My decision was not made yet however, as there were other schools with excellent programs as well (e.g. Waterloo AFM, York’s Schulich, Western Ivey, etc.)

2) Program Perks

Different programs offer different perks. For example, Laurier and Waterloo’s business programs have co-op, which is awesome. Queen’s and Western have more of a general program (their graduates are hired in a large variety of roles), which would allow me to better explore diverse areas of business. Ivey is also special in that it is a two-year program that requires students to study an area of their choice for two years before entering. (I have a friend that really wants to go to Ivey because of this, since she has two subject areas she is strong/interested in and Ivey would allow her to utilize both). In terms of price, Schulich costs much less than other business programs.

Queen’s perks: Third year exchange program (I would love to go to Peking, Tsinghua, or the University of Auckland); small class sizes; excellent recruiting for finance and consulting jobs; has an amazing Commerce Society

3) Location, Location, Location

I knew from the get go that I did not want to leave Canada for undergrad. It would be overly expensive, and I’m just not ready for that step yet (but I do think Switzerland is a lovely country). On the other hand, I wanted to take some “baby steps” to become independent and live outside of Toronto. Living a few hours’ drive away from home for four years seemed like a good fit. This narrowed my choices down further.

By the way, I did not know this when I made my final decision to go to Queen’s, but, apparently according to a new study, Kingston, Ontario is the happiest city in Canada! : )

4) Campus Visits

Goodes Hall, Queen’s University

Stepping on to the Queen’s campus made me 90% sure it was the place.

5) People

The last 10% interestingly enough came from interacting with Queen’s students at university fairs, at the actual campus, and in online blogs. Basically, I was wondering if they were nice people and if they genuinely believed they got a lot out of the program. They were and they did, so my decision was made.

Wow, this post was longer than I expected. I got to go now to study for DECA Provincials! Good luck on deciding where to go and remember, “Shoot for the moon. Even if you miss, you’ll land among the stars.”

My 7 Favourite Words

Ever have the feeling that you favour certain words more than others? Once pronounced, the sound of their syllables makes you feel like exclaiming, “Perfect!” or “I love you!” even though those would quite frankly be ridiculous things to say to a word.

In alphabetical order, here are a few of my personal favourites:

Absolution: It means forgiveness but sounds so much better! I think I like this word because of the “s” sound in the middle. I just feel like the sound is so smooth and sassy. (See what I did there?)

Asphyxiation: Don’t misunderstand. I like this word not for its meaning, but for the way it rolls off my tongue. It’s so rare to see an “x” in the middle of things! It gives the word a kind of magic I can’t quite describe.

Carmine: This one means dark red. I don’t like the word “car” and I only moderately enjoy the word “mine”, so it’s odd that when they combine together, they become a word that is music to my ears.

Diffident: I think aside from “s”, the “f” sound in the middle of a word is also something I’ve noticed I consistently like. Diffident means shy, hesitant and whenever I say or think of the word, an image of Yuki Nagato comes to mind unbidden. Who can resist Yuki? So yeah, one of my faves, hands down.

Dulcet: Sweet. Yes the word is sweet, but its meaning is also literally “sweet”! That aside, it can also mean “pleasing”, which is very interesting, because it allows me to say something ridiculously dorky like “dulcet is a dulcet word” ha ha!

Ineffable: A synonym to unutterable but 100x more pleasing to my ears. To be fair to unutterable though, my friends have made so many cow jokes around me that now hearing the word “utter” makes me think of “udder”… Anyyyway, I like to think this word to myself when I can’t find the right words for something. It calms me down and makes my friends ask me why I’m smiling like an idiot.

Melancholy: Learned this word from The Melancholy of Haruhi Suzumiya. (If you haven’t watched it, watch it! You’ll meet Yuki in it.) It’s that terrible feeling of having a dark gloomy cloud hanging over you 24/7, when your thoughts seem to loop in repeat and never lead anywhere good.

Well, that seems like a rather melancholy note to end on, but I really must get my homework done.

… Oh alright, I’ll give a more satisfying ending.

Sassy!

First Post (of Awesome!)

I totally should not be starting a blog right now, considering I am in grade 12 and even banned myself from writing stories for a year in order to focus on my grades. With that said, the urge to put my thoughts into words was simply too strong to resist! So, this blog is essentially me taking advantage of a loophole in a deal with myself (which now that I think about it, seems rather sad, ha ha).

Overall, I am probably going to post about any random topic that come to mind. I have a large variety of interests, including: TV shows, manga/anime, stocks, the environment, and of course, writing!