Any little bit of news or rumors pops this stock 10-15% or more if the Nasdaq is bullish. This week look for:
1) updates on the gigafactory such incentives offered by competing states or investments by partners
2) rumors that NHTSA is ending their inquiry
3) Upgrades by analysts
4) Buyout rumors
The upper bollinger band is all the way up to $280 so it has plenty of room to run on positive sentiment for itself or the Nasdaq in general. Since December TSLA has been hugging the upper bollinger band and is off substantially now which means it's undervalued by that particular indicator.
Any updates on the gigafactory such incentives offered by competing states or investments by partners. News that nhsta is ending their inquiry. Upgrades by analysts. Buyout rumors. Seems like any little rumor sends this stock up 5-10%. The upper bollinger band is all the way up to $280 so it has plenty of room to run on positive sentiment for itself or the Nasdaq in general. Since December TSLA has been hugging the upper bollinger band and is off substantially now which means it's undervalued by that particular indicator.
The $215 call options will have extremely high volume this week as traders position for a breakout above the all time closing high of $214 on gigafactory sentiment and technical momentum of a stock near its all time high. Swing traders regularly look for breakouts above 52-week highs with most stock screening software having that as a preset daily market scan. Lots of hot money will be playing TSLA this week as an upside breakout play.
Did you at least read his article before writing your message?
Shorting any stock at its all time high is pure gambling. Doubly so for shorting a cult stock at its new all time high.
Posted Friday, Feb 21st on OptionsMonster website (read for free via google news). Gives detailed reasoning to exit short positions and go long this week heading into the Gigafactory conference call
Yahoo does allow links to some websites such as it's own as well as news organizations. So if you find an article that you'd like to share, do a google news search and find the repost from a reputable news organization rather than the original site. Also, don't copy/paste directly from the article since that'll get your account suspended.
The only way to evaluate Tesla short term is from technical analysis Fundamental analysis has proven irrelevant to this stock regardless if you believe it is undervalued and will grow into its valuation or if you believe it is overvalued.
The stock is trading off technicals, not fundamentals. So perhaps you are correct the stock is fundamentally overvalued, but that is irrelevant at this point.
The top indicator of an upside breakout : S&P downgrades today and the stock doesn't react. In fact it would have risen if not for options expiration. Any small rumor about the Giga factory before the call mid-week and we're off to the races. The cnbc technical analysts all agree this is an upside breakout play.
Key points supporting next week's upside breakout:
1) price hugging upper bollinger band. Any sustained piercing is a major buy signal. Was kept below the upper band today because of options expiration.
2) Fast stoch %k about to cross above %d which historically has been a great indicator of TSLA upside breakouts.
3) momentum players coming in on Monday to position for Giga Factory news mid-week. Unlike with quarterly earnings calls, the possibility of negative news is minimal so no incentive for new short positions to be initiated before the conference call.
4) minimal gap up from earnings call (was $203 day before earnings) so will not be taken back down by market makers to fill only a $6 gap.
5) shorts slowly realizing that TSLA will be trading at these levels or higher at least until next earnings call.
6) no more artificial price suppression due to monthly options expiration
Best way to position is through March monthly call options. Premium is minimal now thanks to the post-earnings volatility crush.
Car sales rose in Europe for the 5th month in a row with both Germany and Britain car sales rising more than 7% in January according to Bloomberg just now. http://bloom.bg/1f82rKD
Reported on NBC
During the QA of the earnings call, an analyst did raise the inventory question inferring it can become obsolete (in a polite non-confrontational way). Mgmt said basically that is not an issue and the analyst seemed satisfied. In my opinion, inventory of $20M when annual sales are about $120M does not imply that existing inventory is in danger of becoming obsolete. If it was $120M of inventory for $20M of annual sales that'd be a different situation which thankfully Cyan is not in.
Regarding your EV calculation. I am using stock market value, not enterprise value. Yahoo finance (Capital IQ datafeed) also uses stock market value instead of EV. But to at least answer your point since you took the time to write a reply, even if $5M of debt is subtracted from cash, that still leaves $59.1M in cash and doesn't negatively impact my 12-month buy and hold thesis that much.
Look at 2013 yearly figures at the table attached to the bottom of the earnings press release issued via business wire by Cyan management. You can find it on yahoo finance headlines section as well. Directly from the press release: 30,836 average weighted diluted shares for 2013.
During the earnings call (transcript available for free on seeking alpha and other services), management used the yearly diluted shares figure, not quarterly diluted shares that you are citing from 13G--so I stuck with the same metric for clarity since I assume the analysts on the call will also use mgtm's preferred share count metric.
Inventory and cash are also cited on the earnings call transcript on seeking alpha. Good luck.
There are 30.8 million shares outstanding. The current pps is $3.50. So the current market cap is 30.8 * $3.50 = $107.8M
The components of that $107.8M market cap are:
107.8M market cap - $20.7M inventory - $64.1M cash = $30M value of the business as an ongoing concern
So the market is valuing Cyan at only $30M or 97 cents per share for a company that had $116.1M in annual sales that grew at 22% last year (34% if excluding Windstream) !
Price/Sales for Cyan (backing out cash and inventory): 0.97 / 3.77 = 0.26
Price/Sales for competitors:
ALU CIEN CSCO Industry
0.51 1.13 2.49 1.13
The market is discounting the stock because of the high cash burn. No other reason to explain the low pps.
My 12 month buy-and-hold thesis is we are backed by the largest investment banks, run by an experienced/ respected management team, with world class technology, growing revenues 22% y/y (34% y/y excluding Windstream). The cash burn can be taken care of with layoffs if necessary (hopefully not required) or more sales.
Just to get to the industry average price/sales ratio, this will be a $15.21 stock. If the cash burn can be taken care of, the price/sales ratio would be closer to Cisco's which would make it a $33.52 stock.
What's the worst case? Layoff off every non-R&D employee to get to immediate profitably and then sell the company to Cisco at IPO levels.
I see a steady rise back to the IPO price over the next year. The bottom for the share price is in and all up from here--a very safe investment at this point because of the rising Nasdaq index, high relative cash on the balance sheet, and ridiculously low valuations on a price/sales metric.
Buy some and forget about it. Come back in 12 months. You'll be happy with the gains and the long term capital gains tax treatment. Very seldom do JP Morgan or Goldman Sachs let a stock they took public linger 75% below the IPO price long term. This company has the right pedigree, tech, and Wall Street backing to be a long tem winner for patient investors. Worst case Cisco buys them out.