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Why Tesla (TSLA) Stock is a Compelling Investment Case

Alex Smith
·3 min read
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If you are looking for the best ideas for your portfolio you may want to consider some of Mott Capital's top stock picks. Mott Capital, an investment management firm, is bullish on Tesla Inc. (NASDAQ:TSLA) stock. In its Q4 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Tesla Inc. (NASDAQ:TSLA) stock. Tesla Inc. (NASDAQ:TSLA) is an electric vehicle and clean energy company based in California. The stock is up 111% since the Mott Capital's pitch in January 2020, which suggests the investment firm was right in its decision. On a year-to-date basis, Tesla Inc. (NASDAQ:TSLA) stock has risen by 218%.

On January 23, 2020, Mott Capital had released its Q4 2019 Investor Letter. Mott Capital said that Tesla Inc. (NASDAQ:TSLA) stock rose 74% in the fourth quarter. This isn't the first time Mott Capital talked about Tesla favorably either. Michael Kramer has been a long time Tesla bull. Three years ago we shared Mott Capital's bullish Tesla thesis in this article.

In 2019, the Mott Capital Thematic Growth Composite recorded a return of 35.85% (net of fees) as compared to 31.45% of the S&P 500 Index (total return).

Let’s take a look at comments made by Mott Capital about Tesla Inc. (NASDAQ:TSLA) in the letter.

"Tesla (TSLA) had an incredible fourth quarter, with the shares rising by around 74%. The robust performance has continued into 2020, with the stock increasing an additional 36%, through January 23. The company posted a surprise third quarter profit and announced it would begin its first shipments from its Shanghai Gigafactory to customers in China, as well as the introduction of the Cyber Truck, which received over 250,000 reservations. Additionally, 2020 should be an exciting year as well, as the company continues to ramp-up its growth plans in China and looks to expand into Europe with its fourth Gigafactory based in Germany. Finally, the company will begin the production of its mid-size SUV, the Model Y."

Tesla
Tesla

In Q1 2020, the number of bullish hedge fund positions on Tesla Inc. (NASDAQ:TSLA) stock increased by about 20% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with Tesla's growth potential. Our calculations showed that Tesla Inc. (NASDAQ:TSLA) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a "weekend trading strategy", so we look into his strategy's picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller's investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.