TSLA gets interesting
It’s been a while since Tesla stock has gone on sale. The worry about these “sales” is, of course, that the stock is going to keep continuing downward. Personally, although Elon Musk’s behavior is occasionally problematic and there are always deep questions as to whether electric cars are truly a mass-market solution to the automotive fuel problem, I think this might be an opportunity to get into an interesting investment at a slightly discounted price.
Morningstar’s price analyst estimates a fair value (at the current time) around $240/share. Over the past three years, TSLA shares have fluctuated wildly, between about $180/share (at the end of 2016) to a high of about $380/share, occasionally peeking above.
I think the market has been telling us that in general, depending on the good news or bad news in the news cycle, most investors have been tolerating mood swings between a low of about $240 a share and $360 a share. We’re now breaking below long time low support, which usually means one of two things- either depression has set in and the market is fundamentally undervaluing the investment, or the overall business picture has changed dramatically- and is likely to go lower.
Tesla hasn’t been around for much more than 10 years as an investment option, and while I think the early investors who were able to buy below $50/share have been handsomely rewarded for their patience, I don’t think we’re likely to see a return to those deep discount uncertain days. Longer term price support seems to suggest we will see a low somewhere between $150 and $200, and considering the overall future of both solar and electric vehicles, I’m likely going to be a buyer if prices continue to drop into that range. But, at $217.80/share, I’m dipping my toes into this, and have purchased a tiny stake of 5 shares. My intention at the current time is that I will hold this long-term, and if prices suddenly ascend above $350 a share, I will sell three of those shares. But this is a worthwhile longer term investment, and while it is always a distinct possibility that this investment will go to zero, I think this is as good a time to get in to a good investment at a reasonable price.
note: my opinions are my own. I am not a investment advisor, and am documenting my decisions for my own personal purposes.
