Stock Performance Summary - Tesla Inc (TSLA) $330.35 (-0.9%), 03-06-2018
Consumer Discretionary
Sub-Industry: Automobiles
A high level due diligence for the average Joe.
Disclaimer: This is only an example of a high-level due diligence on a company's overall performance. This is not a recommendation to trade or invest. Please consult with your professional investment manager for your investing or trading needs.
TECHNICAL ANALYSIS (High-Level)
STOCK PERFORMANCE OVER ONE YEAR PERIOD: INVESTORS GAINED 33%
Investors who were bullish on TSLA and held on to their shares for the last 52 weeks gained approximately 33%, a better performance than SPY which gained about 14% during the same period. Those who held on to their shares for the last 3 months gained approximately 8%, a better performance than SPY which gained about 3% during the same period. Recent shareholders who opened their positions in the last 30 days are losers as TSLA shares lost approximately -5% , a poor performance than SPY which lost -3% during the same period. Finally, those who recently opened their position in the last 5 trading days lost approximately -7% losing to SPY by -5%.
The downtrend or losses shown in the one week chart could be a signal of reversal from the uptrend or gains as shown in the one month, one quarter and one year charts. One important market characteristic to remember when investing or trading is that the market will move the price dial regardless of the past performance.
Note: The company does not pay dividends.
VOLUME AND RANGE
Over the last 52 trading weeks, TSLA traded at a daily average of 5,700,000 from a low to high stock price of 242.78 - 389.61. Long term investors usually care less about the daily average volume than day or swing traders as the latter are more concerned about the slippage and volatility which is why day traders always factor-in the volume before trading a stock. Day traders and swing traders are generally concerned as to how quick they can sell the stocks if needed. A very high average volume is an indication of quicker disposal of a stock that may have to be sold on demand. As an example, if the stock trade more than 1,000,000 per day, it should not be a problem selling the stocks.
Another important reason why traders take note of the daily volume is that sudden price increases with volume surges could potentially be followed by a breakout as the momentum builds up. Momentum traders follow these indicators closely and entry prior to explosive breakouts can be profitable if done properly. Note that momentum trading is by itself a trading strategy that requires proper study. For TSLA, the price closed at -0.9% below previous price while the volume decreased by -49.562%.
VOLATILITY: BETA AND AVERAGE TRUE RANGE [ATR]
BETA is the measure of volatility of a stock in comparison with the market. In simple terms, the market has a beta of 1, therefore if the stock has a higher beta, it theoretically implies that the stock will experience higher rate of volatility as a response to many factors that make the market move to any direction. TSLA has a BETA of 1.03 which implies that it is more volatile than the market.
ATR is an indicator of volatility of the stock for the given period, usually 14 days or more. In simple terms, TSLA whose ATR is at $12 indicates that the stock may fluctuate between $.01 - $12 . It is important to note that this indicator is not absolute as the market dictates the actual volatility during the trading day. ATR is usually used by traders to calculate their stop loss. As a practical example, if TSLA was purchased at 330.35 , using the ATR as a guide, the stop loss can be placed at an entry minus a little higher than the ATR to avoid getting stopped by the volatility. In this case, a stop loss can be placed at a little less than 318.35 (calculated as price minus ATR). Some may even go as high as entry price minus X2 of the ATR. Whatever traders choose to use, it is usually based on their risk management practice.
PRICE TARGET
Price targets are analysts or advisors estimates of what might be their most profitable price if they invest in the company. Many analysts or advisors have different factors baked in their price targets calculations and they sometimes have different time periods, although it is acceptable to say a 52 week period is the most common timeframe. TSLA has a price target of about $325.67. In simple terms, TSLA is currently trading above its target price by about 1.33% which is a good indication that it has reached the price target. An upgrade sometimes follow if the company continues to improve its outlook, especially its EPS and revenue. If not, a downgrade or no action could follow.
MAJOR SUPPORT LEVEL: SMA 200 AND SMA 50
TSLA is currently trading below its SMA 200 by about -2.5%. SMA 200 is generally considered by many as a major support for stocks. This is measured using a period of 40 trading weeks. Many traders and investors consider price below SMA 200 as an indication of downtrend and therefore a good time to short. In theory, if traders and investors have respected the stocks' SMA 200 (that is, the price has historically bounced off SMA 200), it is considered a good time to open a position every time the price touches or is near SMA 200 with the expectation of the price to rise back up as it has done in the past.
TSLA is currently trading below its SMA 50 by about -1.28%. In theory, if traders and investors have respected the stocks' SMA 50 (that is, the price has historically bounced off SMA 50), it is considered a good time to open a position everytime the price touches or is near SMA 50 with the expectation of the price to rise back up as it has done in the past.
INSIDER TRADING AND SMART MONEY
Insider ownership is a very powerful indicator as it provides a snapshot of how the insiders (employees, executives, officers) view the company. As they have direct knowledge of the company’s health and operations, in theory, they are better judge of the company's future, provided they are not involved in any unlawful insider dealings.
As of the most recent SEC Form 3 filings, insider ownership is at 0.1% after insider transactions resulted in -11.88% decrease.
As of the most recent SEC Form 13F filings, institutional ownership is about 61.4% after 0% change. The level of institutional ownership or more popularly referred to as Smart Money can be used as a factor in determining the investing or trading outlook of large funds towards the Company. A high or increasing trend in institutional ownership over a longer period can be interpreted as a bullish sentiment from these large funds.
SHORT FLOAT AS A SENTIMENT INDICATOR
Short float is percentage of shares being traded as ""short"" in relation to the total shares out in the market available for public trading. Currently, total short float is 23.5%. Short float is sometimes used by traders as an additional indicator of sentiment from traders. In simple terms, a very high short float percentage can sometimes indicate a bearish sentiment as more traders hopes the stock price to fall while a low percentage can be generally considered bullish as less traders think price would not fall. Using short float should be analyzed from various perspective. As an example, it can show a better picture if the trend of short float is analyzed in relation to the number of days to cover. Again, various factors should be put together to provide a more meaningful data to use this as a factor in determining trader's sentiment.
KEY FUNDAMENTAL ANALYSIS (High-Level)
PROFITABILITY INDICATOR RATIOS: Margins
Investors or traders look at profit margin ratios to help them determine how well the company used its assets in generating profit. These profitability ratios focuses on a very important item in the financial performance of the company, ""profit"". Positive or high profitability ratios are viewed positively and are good indications of long-term stability and upside in terms of shareholder value. These profitability ratios when compared to their sub industry group averages are even better indicators than just looking at the financial statement balances.
Gross Margin better than its Sub-industry. Based on the last twelve months sales, TSLA posted a gross margin rate of 33%,a good indication that the company is currently selling its products/services above its cost. This is usually considered as a first test of profitability. The sub-industry average meanwhile posted gross margin of 25.92%.
Operating Margin weaker than its Sub-industry average. Based on the last twelve months sales, TSLA posted a negative operating margin of -13%, a red flag that reflects inefficient use of resources attributable to the company's operating costs such as selling, general and administrative expenses. Note that the management is directly in control of its operating expenses, therefore the operating results can be directly attributed to the management's decisions. The sub-industry posted an average operating margin of 5.33%.
Pretax Margin weaker than its Sub-industry Average. Based on the last twelve months sales, TSLA posted a negative pretax margin of -19%, a red flag that reflects inefficiency in relation to its tax planning activities. The same-industry posted an average pretax margin of 5.76%.
EPS CHANGE OF 26.19% AND REVENUE IMPROVEMENT BY 95% IN THE LAST 5 YEARS TSLA showed a change in its EPS by 26.19%, a rate higher than the sector average change of 13.74%. This may indicate a stronger growth trend when compared to its competitors within the sector.
During the same period TSLA showed a change in its revenue by 95%, a rate higher than the sector average change of 11%. This may indicate a stronger grip of its market share when compared to its competitors within the sector.
MARKET CAPITALIZATION
The market capitalization is 55.33B is while the average sector market capitalization is $10.16B
BALANCE SHEET STRENGTH
The debt to assets ratio at 34.01% . Leverage can be interpreted in many ways. Depending on the industry, heavy leverage may or may not be a good thing. It is difficult to interpret the financial health of the company by looking at the leverage alone. From a risk perspective, it is safe to assume that less than 50% leverage or low debt in the balance sheet is better than high debt ratios.
The current ratio is 1 which may mean the company is able to meet it short term obligations. Higher current ratios are generally an indication of well managed working capital.
As of the most recent filing, the free cash flow is $-4.14B. This means the company is unable to maintain a positive cash flows after operating expenses and its capital expenditures. Prolonged negative free cash flow may signal potential future capital raise through issuance of stocks or taking more debt to fund both operations and capital expenditures. This situation may indicate that the current operations cannot sustain the working capital and the expansion of its assets base.
Consumer Discretionary
Sub-Industry: Automobiles
A high level due diligence for the average Joe.
Disclaimer: This is only an example of a high-level due diligence on a company's overall performance. This is not a recommendation to trade or invest. Please consult with your professional investment manager for your investing or trading needs.
STOCK PERFORMANCE OVER ONE YEAR PERIOD: INVESTORS GAINED 33%
Investors who were bullish on TSLA and held on to their shares for the last 52 weeks gained approximately 33%, a better performance than SPY which gained about 14% during the same period. Those who held on to their shares for the last 3 months gained approximately 8%, a better performance than SPY which gained about 3% during the same period. Recent shareholders who opened their positions in the last 30 days are losers as TSLA shares lost approximately -5% , a poor performance than SPY which lost -3% during the same period. Finally, those who recently opened their position in the last 5 trading days lost approximately -7% losing to SPY by -5%.
The downtrend or losses shown in the one week chart could be a signal of reversal from the uptrend or gains as shown in the one month, one quarter and one year charts. One important market characteristic to remember when investing or trading is that the market will move the price dial regardless of the past performance.
Note: The company does not pay dividends.
VOLUME AND RANGE
Over the last 52 trading weeks, TSLA traded at a daily average of 5,700,000 from a low to high stock price of 242.78 - 389.61. Long term investors usually care less about the daily average volume than day or swing traders as the latter are more concerned about the slippage and volatility which is why day traders always factor-in the volume before trading a stock. Day traders and swing traders are generally concerned as to how quick they can sell the stocks if needed. A very high average volume is an indication of quicker disposal of a stock that may have to be sold on demand. As an example, if the stock trade more than 1,000,000 per day, it should not be a problem selling the stocks.
Another important reason why traders take note of the daily volume is that sudden price increases with volume surges could potentially be followed by a breakout as the momentum builds up. Momentum traders follow these indicators closely and entry prior to explosive breakouts can be profitable if done properly. Note that momentum trading is by itself a trading strategy that requires proper study. For TSLA, the price closed at -0.9% below previous price while the volume decreased by -49.562%.
VOLATILITY: BETA AND AVERAGE TRUE RANGE [ATR]
BETA is the measure of volatility of a stock in comparison with the market. In simple terms, the market has a beta of 1, therefore if the stock has a higher beta, it theoretically implies that the stock will experience higher rate of volatility as a response to many factors that make the market move to any direction. TSLA has a BETA of 1.03 which implies that it is more volatile than the market.
ATR is an indicator of volatility of the stock for the given period, usually 14 days or more. In simple terms, TSLA whose ATR is at $12 indicates that the stock may fluctuate between $.01 - $12 . It is important to note that this indicator is not absolute as the market dictates the actual volatility during the trading day. ATR is usually used by traders to calculate their stop loss. As a practical example, if TSLA was purchased at 330.35 , using the ATR as a guide, the stop loss can be placed at an entry minus a little higher than the ATR to avoid getting stopped by the volatility. In this case, a stop loss can be placed at a little less than 318.35 (calculated as price minus ATR). Some may even go as high as entry price minus X2 of the ATR. Whatever traders choose to use, it is usually based on their risk management practice.
PRICE TARGET
Price targets are analysts or advisors estimates of what might be their most profitable price if they invest in the company. Many analysts or advisors have different factors baked in their price targets calculations and they sometimes have different time periods, although it is acceptable to say a 52 week period is the most common timeframe. TSLA has a price target of about $325.67. In simple terms, TSLA is currently trading above its target price by about 1.33% which is a good indication that it has reached the price target. An upgrade sometimes follow if the company continues to improve its outlook, especially its EPS and revenue. If not, a downgrade or no action could follow.
MAJOR SUPPORT LEVEL: SMA 200 AND SMA 50
TSLA is currently trading below its SMA 200 by about -2.5%. SMA 200 is generally considered by many as a major support for stocks. This is measured using a period of 40 trading weeks. Many traders and investors consider price below SMA 200 as an indication of downtrend and therefore a good time to short. In theory, if traders and investors have respected the stocks' SMA 200 (that is, the price has historically bounced off SMA 200), it is considered a good time to open a position every time the price touches or is near SMA 200 with the expectation of the price to rise back up as it has done in the past.
TSLA is currently trading below its SMA 50 by about -1.28%. In theory, if traders and investors have respected the stocks' SMA 50 (that is, the price has historically bounced off SMA 50), it is considered a good time to open a position everytime the price touches or is near SMA 50 with the expectation of the price to rise back up as it has done in the past.
INSIDER TRADING AND SMART MONEY
Insider ownership is a very powerful indicator as it provides a snapshot of how the insiders (employees, executives, officers) view the company. As they have direct knowledge of the company’s health and operations, in theory, they are better judge of the company's future, provided they are not involved in any unlawful insider dealings.
As of the most recent SEC Form 3 filings, insider ownership is at 0.1% after insider transactions resulted in -11.88% decrease.
As of the most recent SEC Form 13F filings, institutional ownership is about 61.4% after 0% change. The level of institutional ownership or more popularly referred to as Smart Money can be used as a factor in determining the investing or trading outlook of large funds towards the Company. A high or increasing trend in institutional ownership over a longer period can be interpreted as a bullish sentiment from these large funds.
SHORT FLOAT AS A SENTIMENT INDICATOR
Short float is percentage of shares being traded as ""short"" in relation to the total shares out in the market available for public trading. Currently, total short float is 23.5%. Short float is sometimes used by traders as an additional indicator of sentiment from traders. In simple terms, a very high short float percentage can sometimes indicate a bearish sentiment as more traders hopes the stock price to fall while a low percentage can be generally considered bullish as less traders think price would not fall. Using short float should be analyzed from various perspective. As an example, it can show a better picture if the trend of short float is analyzed in relation to the number of days to cover. Again, various factors should be put together to provide a more meaningful data to use this as a factor in determining trader's sentiment.
KEY FUNDAMENTAL ANALYSIS (High-Level)
PROFITABILITY INDICATOR RATIOS: Margins
Investors or traders look at profit margin ratios to help them determine how well the company used its assets in generating profit. These profitability ratios focuses on a very important item in the financial performance of the company, ""profit"". Positive or high profitability ratios are viewed positively and are good indications of long-term stability and upside in terms of shareholder value. These profitability ratios when compared to their sub industry group averages are even better indicators than just looking at the financial statement balances.
Gross Margin better than its Sub-industry. Based on the last twelve months sales, TSLA posted a gross margin rate of 33%,a good indication that the company is currently selling its products/services above its cost. This is usually considered as a first test of profitability. The sub-industry average meanwhile posted gross margin of 25.92%.
Operating Margin weaker than its Sub-industry average. Based on the last twelve months sales, TSLA posted a negative operating margin of -13%, a red flag that reflects inefficient use of resources attributable to the company's operating costs such as selling, general and administrative expenses. Note that the management is directly in control of its operating expenses, therefore the operating results can be directly attributed to the management's decisions. The sub-industry posted an average operating margin of 5.33%.
Pretax Margin weaker than its Sub-industry Average. Based on the last twelve months sales, TSLA posted a negative pretax margin of -19%, a red flag that reflects inefficiency in relation to its tax planning activities. The same-industry posted an average pretax margin of 5.76%.
EPS CHANGE OF 26.19% AND REVENUE IMPROVEMENT BY 95% IN THE LAST 5 YEARS TSLA showed a change in its EPS by 26.19%, a rate higher than the sector average change of 13.74%. This may indicate a stronger growth trend when compared to its competitors within the sector.
During the same period TSLA showed a change in its revenue by 95%, a rate higher than the sector average change of 11%. This may indicate a stronger grip of its market share when compared to its competitors within the sector.
MARKET CAPITALIZATION
The market capitalization is 55.33B is while the average sector market capitalization is $10.16B
BALANCE SHEET STRENGTH
The debt to assets ratio at 34.01% . Leverage can be interpreted in many ways. Depending on the industry, heavy leverage may or may not be a good thing. It is difficult to interpret the financial health of the company by looking at the leverage alone. From a risk perspective, it is safe to assume that less than 50% leverage or low debt in the balance sheet is better than high debt ratios.
The current ratio is 1 which may mean the company is able to meet it short term obligations. Higher current ratios are generally an indication of well managed working capital.
As of the most recent filing, the free cash flow is $-4.14B. This means the company is unable to maintain a positive cash flows after operating expenses and its capital expenditures. Prolonged negative free cash flow may signal potential future capital raise through issuance of stocks or taking more debt to fund both operations and capital expenditures. This situation may indicate that the current operations cannot sustain the working capital and the expansion of its assets base.