Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[FEERSUMENDJIN]

It appears I may be more obstreperous than are you. Some have said that from time to time I may tend to be rigid in that respect. Your approach is worthy of respect, even from someone as doctrinaire as I may

OK, I have to ask about #2.

On the most recent call, Tesla said they were taking scrap aluminum, including that from ICE wheels, and melting it down and feeding it back into the production process.

That didn't sound compatible to me with the special proprietary formulation making the Gigapress possible/better. How can they achieve the special formulation when feeding it with random melted scrap?

What am I missing?

Nothing a bit of spectroscopy could not solve

 

[wtlloyd]

Eh, see none of that bothers me. I'm holding my TSLA shares long and all of this volatility doesn't really mean all that much to me, because I have good confidence where Tesla is going long term.

BUT, today, the market still feels apprehensive to me.

Volatility = Opportunity. Otherwise, I'm mostly thinking about what I'll have for lunch. This stock is still a seedling, I won't be looking for fruit to pick for years yet. So I don't worry about the carousel going up and down, that's the nature of the ride.

I'd love to be clever and play around with various instruments that increase beyond what the stock valuation is doing, but 3 years of following this forum pretty closely has proven to me nobody knows nothing about what the stock is certain to do next.

 

[The Accountant]

Strong Exports from Fremont
A 3rd ship departing Fremont in Q2 has been identified. There were only 2 ships each in Q4 '21 and Q1 '22.
I estimate loading time for Q2 to be 7.62 days vs 4.39 days in Q1.
We know that North American demand is huge for Tesla, so their decision to direct more production to Asia Pacific may indicate that Q2 production at Fremont & Austin is rocking !!

View attachment 800018

I need to update this post. Glovis Sunlight only loaded for less than a day (20 hours) and is now directed from San Francisco to Portland Oregon.
I bit odd. Perhaps this is a more inexpensive way to deliver cars to Oregon, Washington State and Vancouver Canada.

 

[FEERSUMENDJIN]

Yep, wondered about that. Didn't think beer cans and Reynolds Wrap could randomly be thrown into the kettle that produces a proprietary ingot.

Just need to chef it right.

 

[StealthP3D]

So the only thing I use this for is for comparative purposes of long term outlook. I look at the P/E of an interesting stock and where the company is to compare it against other investment possibilities or historical growth companies. I've been using this with TSLA and I guess we'll see where it stands over the test of time but I firmly believe that it's the best indicator for the value of the stock at the given point in time.

The "best" indicator of the value of any particular stock is too incomplete to be meaningful in isolation. It would be like saying sugar is the most important ingredient in a cake. The price to earnings growth ratio is a better indicator of value than P/E ratio but, when taken in isolation, even that is worthless.

I feel like the P/E ratio is over-used on both sides of the coin. Bears point to the high P/E ratio, bulls point to the low P/E ratio. The truth is the P/E ratio doesn't matter much because it's a backward-looking indicator and it is literally impossible to accurately value a company by looking backward. True value is an unknown because it is based on future events that have not yet occurred. This is what makes a market. The best deals occur when the market is wrong so don't ever wish that markets were always as rational, accurate or as smart as you. Because then stocks would have the same returns as US Treasuries.

 

[Gigapress]

newest Impact Report is out

Impact | Tesla

Our mission is to accelerate the world’s transition to sustainable energy. Read our 2022 Impact Report.

www.tesla.com

Wow these just get better every year! It’s 144 pages now so here are the highlights.

“In 2021, the global fleet of Tesla vehicles, energy storage and solar panels enabled our customers to avoid emitting 8.4 million metric tons of CO2e”

“Tesla solar panels have generated more electricity [25 TWh] than has been consumed by our vehicles and factories between 2012 and 2021”

Job applicants
2021: 3 million
2020: 2.3 million
2019: 0.8 million

Reiteration of 2030 goal of 20 million cars produced and 1.5 TWh stationary batteries deployed.

Corporate governance details provided that haven’t been in previous Impact Reports, but won’t list them here except one thing: Tesla executives and board of directors do not receive any cash bonus nor any severance packages (golden parachutes).

Employee benefits details that haven’t been shared before. They’re very good. Surprises (to me) include:

• “We have recently introduced unlimited vacation time for salaried employees”
• Extensive fertility and adoption services support and reimbursement
• 16 weeks family leave, 9 weeks maternity leave and 6 weeks new parent leave, all paid
• Transportation and lodging expenses paid for employees needing to travel out of state for healthcare services
  • (presumably this would include female employees traveling out of Texas for certain reproductive procedures prohibited there…not trying to start a debate about that but just to point out the fact that the histrionics in the Tesla/SpaceX community a few months ago about continuing to develop a presence in Texas were mostly moot because Tesla already supports and pays for medical travel)

69% of new managers/directors/executives in 2021 were promoted internally

Diversity data in hiring (in USA only) - detailed breakdown provided, crushing it compared to manufacturing industry averages and decently better than tech industry.

Energy consumption per vehicle manufactured is plummeting with manufacturing improvements, 4680s, AI controlling more factory HVAC, deleting robots, designing for smoother material flow within the factory, shorter supply chains, and compressor waste heat recapturing.

Giga Shanghai produces 10 kg of solid waste to landfill per vehicle and 170 kg of solid waste recycled. Less than half the total solid waste per car from Fremont. Having the loading docks dropping off materials directly lineside has yet another advantage I hadn’t thought of: less protective packaging required.

Giga Berlin uses a bit over 2 cubic meters (2000 liters) of water per car made. For reference this is half the consumption for ICE makers (except BMW for some reason) and the same as a pound of conventionally raised chicken. Clear opportunities for heavy reductions from here are in the works.

Global supercharger network was finally 100% renewable-powered in 2021, “achieved through a combination of onsite resources and annual renewable matching”. Home charging in California is now also 100% renewable offset by Tesla.

In-house battery recycling already at 92% recovery.

Themes

1. All investors should read. Tesla sneaks all the best info into the annual Impact Report and Wall Street probably doesn’t bother to read because not much financial information is included.
2. Tesla’s lifecycle environmental damage per vehicle trending towards zero and may be competitive with the humble bicycle a decade from now.
3. The notion that Tesla has rampant unchecked racism and misogyny is strongly contradicted by the data.
4. UAW unionization would be redundant at best, in terms of employee treatment, safety, pay, benefits, promotion fairness, training, and general empowerment.
5. Tesla has a massive and untouchable data advantage throughout all aspects of the enterprise.

 

[Gigapress]

That’s what they want you to believe. I’m telling you, straight up, they decide whether the peanut butter is too smooth or too crunchy and will change their minds when it suits. For now, that metric works for them. Tomorrow, maybe not so much.

Seriously, who do you think came up with that specific set of parameters and deemed them relevant and connected to each other? It didn’t just magically appear. Somebody, somewhere, at some point, decided that’s what it should be in that specific set of circumstances and everyone else said okay let’s go with it for now.

It’s like the person who originally decided someone wanting a mortgage couldn’t qualify unless the monthly mortgage payment didn’t exceed 30% (or whatever) of their total monthly income. Yes, that’s a thing and it’s a sensible metric except when someone else wants to pull shenanigans and hand out mortgages at ridiculous, non sustainable rates to people who can’t afford them until 2008 happens. Regroup. Tighten the belt. Make like we won’t make the same mistake again. Wait for people to forget. Rinse and repeat.

So sure, use the established P/E metrics associated with various circumstances and companies for reference, but assume later today they could all change because there’s money to be skimmed.

Maybe this sounds paranoid or conspiracy theorist to you. I’ve had my already opened eyes widened.

P/E ratio is directly related to return on invested capital in steady state conditions because it encapsulates dividend potential per share. Arguably it’d be superior to use free cash flow instead of earnings, but in the long run that’s a negligible accounting difference.

A 10 P/E is equivalent to 1/10=10% ROIC
20 P/E —> 5%
30 —> 3.3%

To your point, when the conversation concerns what the “right” P/E ratio is for a given company, sector or macroeconomy, then arbitrary opinion comes into play.

 

[Singuy]

25k hired from 3 million applications. Acceptance rate is 0.83%

Stanford acceptance rate is 5.2%

 

[Krugerrand]

This needs to be everyone's first thought when making investment decisions these days. If dead investors don't believe

It’s my first thought every time I hear a news report, a commercial, a documentary, a professional in a field I’m unfamiliar with, and any and all information dissemination.

Yeah, I’m literally that suspicious of every word that comes out of anyone’s mouth I don’t have a certain level of familiarity with. Bloody sad.

 

[UkNorthampton]

P/E ratio is directly related to return on invested capital in steady state conditions because it encapsulates dividend potential per share. Arguably it’d be superior to use free cash flow instead of earnings, but in the long run that’s a negligible accounting difference.

A 10 P/E is equivalent to 1/10=10% ROIC
20 P/E —> 5%
30 —> 3.3%

To your point, when the conversation concerns what the “right” P/E ratio is for a given company, sector or macroeconomy, then arbitrary opinion comes into play.

Yahoo has the "PEG Ratio (5 yr expected)" at 2.10 which I'm presuming to be using pessimistic guesses or low historical numbers/predictions for earnings or growth (as is often the case for mainstream finance's Tesla analysis).

Peter Lynch wanted below 1 to buy, not sure what is thought sensible now, if it's different and financial metrics are NOT my thing.

Anyone have a conservative forward-looking optimistic (tesla realistic) figure? Is it below 1 with 50-70% likely CAGR / annual growth?

Spoiler: Some-Sources

I'm not sure where to get reliable info - any use? The Complete Toolbox For Investors | finbox.com.

https://www.nasdaq.com/market-activity/stocks/tsla/price-earnings-peg-ratios

 

[Singuy]

Yahoo has the "PEG Ratio (5 yr expected)" at 2.10 which I'm presuming to be using pessimistic guesses or low historical numbers/predictions for earnings or growth (as is often the case for mainstream finance's Tesla analysis).

Peter Lynch wanted below 1 to buy, not sure what is thought sensible now, if it's different and financial metrics are NOT my thing.

Anyone have a conservative forward-looking optimistic (tesla realistic) figure? Is it below 1 with 50-70% likely CAGR / annual growth?

Spoiler: Some-Sources

I'm not sure where to get reliable info - any use? The Complete Toolbox For Investors | finbox.com.

View attachment 801275

https://www.nasdaq.com/market-activity/stocks/tsla/price-earnings-peg-ratios

View attachment 801276

I believe they arrived at the growth number using analysts' average which most have Tesla growing around 25-35% after this year.

 

[StarFoxisDown!]

Yahoo has the "PEG Ratio (5 yr expected)" at 2.10 which I'm presuming to be using pessimistic guesses or low historical numbers/predictions for earnings or growth (as is often the case for mainstream finance's Tesla analysis).

Peter Lynch wanted below 1 to buy, not sure what is thought sensible now, if it's different and financial metrics are NOT my thing.

Anyone have a conservative forward-looking optimistic (tesla realistic) figure? Is it below 1 with 50-70% likely CAGR / annual growth?

Spoiler: Some-Sources

I'm not sure where to get reliable info - any use? The Complete Toolbox For Investors | finbox.com.

View attachment 801275

https://www.nasdaq.com/market-activity/stocks/tsla/price-earnings-peg-ratios

View attachment 801276

Yes if you were to take estimates for EPS from some here like myself, PEG is below 1.

Wall St has, and continues to, "game" Tesla's fundamentals and metric by giving embarrassingly low EPS estimates. Q2 Non-GAAP EPS consensus right now is $2.28......that's Non-GAAP. It's a joke. Tesla had $2.86 in GAAP EPS in Q1.

But it also makes Tesla's future stock action very predictable if you ask me. Predictable in that each future quarters earnings will set a new floor for the stock. I still continue to think Tesla's reign as the most heavily traded options stock is coming to a close. It's too one-sided at this point. And it's drastically one-sided.

Just to point how drastic off Wall St is right now, Apple has a PEG of 3.03. So even if you take Wall St's embarrassingly low EPS estimates which gives Tesla a PEG of 2.10, TSLA is still undervalued by a third compared to Apple.

 

[StarFoxisDown!]

I believe they arrived at the growth number using analysts' average which most have Tesla growing around 25-35% after this year.

PEG uses average analysts EPS growth estimates. Which is even more embarrassing than their revenue growth estimates

 

[M|S|M MYP]

Yes if you were to take estimates for EPS from some here like myself, PEG is below 1.

Wall St has, and continues to, "game" Tesla's fundamentals and metric by giving embarrassingly low EPS estimates. Q2 Non-GAAP EPS consensus right now is $2.28......that's Non-GAAP. It's a joke. Tesla had $2.86 in GAAP EPS in Q1.

But it also makes Tesla's future stock action very predictable if you ask me. Predictable in that each future quarters earnings will set a new floor for the stock. I still continue to think Tesla's reign as the most heavily traded options stock is coming to a close. It's too one-sided at this point. And it's drastically one-sided.

They should make a rule that there is a cutoff date for modifying GAPP EPS in a qtr...i can't stand these idiots lowballing and then having the opportunity to keep adjusting and adjusting until they get closer and closer, its like playing a video game with infinite credits. And, if $TSLA for some reason does not meet the EPS, they can say growth slowing, etc....tanking the stock.

 

[dm28997]

I need to update this post. Glovis Sunlight only loaded for less than a day (20 hours) and is now directed from San Francisco to Portland Oregon.
I bit odd. Perhaps this is a more inexpensive way to deliver cars to Oregon, Washington State and Vancouver Canada.

Yes. With diesel prices over $6/gallon it might be less costly to ship. Not sure but the time might be faster/vehicle by ship than trailer. We were on a vacation and traveled via Fremont to charge; WOW, the activity is crazy. I won't say more about what I saw except I met a Plaid buyer picking up his vehicle and the excitement was contagious.

 

[Nocturnal]

Yes if you were to take estimates for EPS from some here like myself, PEG is below 1.

Wall St has, and continues to, "game" Tesla's fundamentals and metric by giving embarrassingly low EPS estimates. Q2 Non-GAAP EPS consensus right now is $2.28......that's Non-GAAP. It's a joke. Tesla had $2.86 in GAAP EPS in Q1.

It's interesting that some of the more prominentloud bears have this same complaint about Tesla. Of course their conclusion is wildly different because they believe WS is doing this to allow Tesla to continually beat expectations for...reasons.

 

[ZachF]

Yahoo has the "PEG Ratio (5 yr expected)" at 2.10 which I'm presuming to be using pessimistic guesses or low historical numbers/predictions for earnings or growth (as is often the case for mainstream finance's Tesla analysis).

Peter Lynch wanted below 1 to buy, not sure what is thought sensible now, if it's different and financial metrics are NOT my thing.

Anyone have a conservative forward-looking optimistic (tesla realistic) figure? Is it below 1 with 50-70% likely CAGR / annual growth?

Spoiler: Some-Sources

I'm not sure where to get reliable info - any use? The Complete Toolbox For Investors | finbox.com.

View attachment 801275

https://www.nasdaq.com/market-activity/stocks/tsla/price-earnings-peg-ratios

View attachment 801276

Analysts are predicting ~$15b in profit in…2024? They could beat that this year.

 

[SN_8]

Employee benefits details that haven’t been shared before. They’re very good. Surprises (to me) include:

• “We have recently introduced unlimited vacation time for salaried employees”

This is good for the financials, but not really a huge perk for the employees. Studies repeatedly show that employees with "unlimited" time off actually use less than if they had a standard 3-4 weeks of PTO.

 

[CLK350]

FYI - for folks who aren't on Twitter, reactions from the Impact report w/ reaction from Elon

If not on Twitter, do show your support for Tesla/ Elon - this is one of the few outlets of news that is not completely overtaken by anti Tesla obfuscations and outright lies.

Register for Twitter (under a pseudo or not), just follow Elon, and an assortment of sources you trust to get started. This will provide you with a less programmed-by-special-interests restricted view of news national or international. You can also choose to follow your newspapers, knowing their bias of course. I prefer to add them to specific lists, without following them, so that I can see what is happening in various echo chambers.

Core Elon /Tesla supporters:

Rob Maurer https://twitter.com/TeslaPodcast - If you have limited time Rob has the best daily summary on YouTube
Daily Tesla YouTube recap https://www.youtube.com/channel/UCgYkuL87rUwiBl7tqfN53Eg

Tim Urban https://twitter.com/waitbutwhy
One of the few people Elon follows - great info on its own - see his website/ blog Wait But Why

Pranay Pathole https://twitter.com/PPathole
His tweets often endorsed by Elon

Rational Etienne / Pope of Muskanity https://twitter.com/RationalEtienne

Whole Mars Catalog https://twitter.com/WholeMarsBlog
....

And some others re Wall Street view and your preferred political pundits - these will link to their blogs or substacks, publications

Gary Black https://twitter.com/garyblack00 For a more trading view of TSLA

(...) you own selection

 

[StarFoxisDown!]

They should make a rule that there is a cutoff date for modifying GAPP EPS in a qtr...i can't stand these idiots lowballing and then having the opportunity to keep adjusting and adjusting until they get closer and closer, its like playing a video game with infinite credits. And, if $TSLA for some reason does not meet the EPS, they can say growth slowing, etc....tanking the stock.

It used to irritate the hell out of me but I could honestly care less at this point.

And that's because the scale of Tesla's earnings are now have very big impacts on fundamentals. Even though analysts EPS estimates are still a joke, they were forced to move up their 2022 and 2023 EPS after Q1's numbers. If Q1's earnings hadn't been what they were, TSLA would probably be in the low 700's/upper 600's right now considering the Nasdaq is nearly 4% lower than it was in March when TSLA was in the low 700's......plus Elon had his stock sales

Wall St got a get out of jail card for Q2 thanks to China's Covid policies to keep playing this game.......but what happens after Tesla prints a $4 GAAP EPS for Q3? Or even yet, if Q2's earnings come in higher than Q1's (possible if they get within 5k of Q1's delivery number thanks to additional price hikes flowing through to deliveries, more S/X, more production out of Berlin/Austin over Q1 which may not help gross margin, but will increase operating margin thanks to more revenue to cover cost of operations at both Berlin/Austin)