Is Tesla Motors Inc. a $500 Stock? It’s Possible
Over the next couple of years, you could make triple-digit gains in one of the most remarkable companies on Earth: Tesla Motors, Inc. (NASDAQ:TSLA). No, you won’t get rich quick, but as I’m about to show you, a bull market in TSLA stock is almost inevitable. And before the run is over, we could see TSLA stock price double–or more.
Here are three reasons to be bullish on Tesla stock.
The Smart Money is Buying Tesla Stock
The world’s smartest money managers are backing Tesla.
According to recent SEC filings, legendary technology investor Daniel Benton has been quietly building up his stake in the company over the past few quarters. As of June 30th, he owned one million shares valued at $268.2 million.
And he’s not the only one. Last quarter, a number of hedge fund managers—including Frank Slattery, D.E. Shaw, and Paul Cantor—initiated or increased the size of their stake in the company. Billionaire money manager Ken Griffin also owns a $232.8 million position in combined equity and call options.
Tesla is Finding New Expansion Opportunities
Now, I have to ask you: what would have these money mavens so excited? I’d say it could mean only one thing: they see a giant opportunity ahead.
While the market for electric vehicles has a long growth runway ahead of it, Tesla is finding a number of new opportunities to push sales even further. For one, the EV maker introduced a lower-cost lease option that reduces the monthly cost of owning a leased Model S by as much as 25%. This should push more Tesla units in upcoming quarters. (Source: “Significantly Improved Leasing for a Tesla with US Bank,” Tesla Motors, October 25, 2014.)
This doesn’t even account for the huge opportunity internationally. Tesla Motors now sells its gas-free cars in 15 countries, including Canada, Norway, China, Austria, and the U.K., to name a few. If the company can capture even one percent of the global auto market, the TSLA stock could triple from here.
Electric Vehicles Are Just the Beginning
Conquering the global automotive industry would be enough for most companies, but CEO Elon Musk is even more ambitious. In April, the tech visionary announced that the company would move into solar energy. It would offer a suite of battery systems to homeowners, businesses, and utilities. (Source: “Powerwall; Tesla Home Battery, Tesla Motors,” last accessed October 29, 2015.)
“The consumer product, called Powerwall, is actually not that expensive compared to Tesla’s automotive offerings.” Wrote my colleague Jing Pan in August. “A seven kWh unit costs $3,000, while a 10 kWh unit costs $3,500. These systems would provide enough power for basic home appliances during blackouts.” (Source: “Is Tesla Motors, Inc. a $500 Stock?” Profit Confidential, August 3, 2015.)
Homeowners are just the beginning for Powerwall. Elon Musk believes these batteries could be scaled up for industrial uses. The potential customers for Powerwall are virtually limitless, including schools, hospitals, shopping malls, and utility companies.
Bottom line, Tesla stockholders should be excited given the number of catalysts that could lift TSLA stock in the coming years. I’m not betting against this company.