General

Tesla: The best near-term capital gain prospect for automakers (NASDAQ:TSLA)

Peter F. Way, CFA profile picture

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Investment strategy

Market prices to be is predicted every day by self-protective, disruptive actions by Market Makers negotiating large-scale block trades for institutional investors managing their billion-dollar investment portfolios.

Registrations of market results after such daily forecasts make their trends visually trackable and their rewards and risk exposures explicit in graphical form. The photos are the results, not some hoped-for tools for guessing what might happen later. While there are no guarantees for the future, hand-held examples are much better than hypothetical claims without evidence.

In addition, the outcomes follow identical strategy disciplines for all stocks, making forecast expectations directly comparable. In this way personal preferences can be followed accurately.

The main stock in this article is Tesla, Inc. (TSLA).

Company description

Tesla, Inc. designs, develops, manufactures, leases and sells electric vehicles and energy generation and storage systems in the United States, China and internationally. The company operates in two segments, Automotive and Energy Generation and Storage. offers electric vehicles and sells automotive legal credits. It provides sedans and SUVs through direct and used car sales, a network of Tesla Superchargers and in-app upgrades, and purchase financing and leasing services. The storage segment is engaged in designing, manufacturing, install, sell and lease solar power generation and energy storage products, and related services to residential, commercial, industrial and utility customers through its website, retail stores and galleries, as well as through a network of channel partners. The company was previously known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tes la, Inc . was founded in 2003 and is headquartered in Austin, Texas.”

Source: Yahoo Finance

street analyst estimates

Yahoo Finance

We start with comparisons of reward prospects and risk exposures

Figure 1

MM hedging forecasts

blockdesk.com

(used with permission)

The expected rewards for these securities are the largest gains from the current closing market price that are worth protecting short positions. Their size is on the horizontal green scale.

The risk dimension is of actual price declines at their most extreme, while being held in the past pursuit of upward rewards similar to those currently seen. They are measured on the red vertical scale.

Both scales are of percentage change from zero to 25%. Any stock or ETF whose current risk exposure exceeds the reward outlook will be above the dotted diagonal line. Attractive to buy issues with capital gains are in the down and right directions.

Our primary interest is in TSLA on site [1]halfway between [12] and [4]. A “market index” standard of reward-risk trade-offs is provided by SPY at [9]. The most appealing (to own) because of this Figure 1 view is TM on location [12] but further research will show why this is not the case.

Compare features of alternative investment stocks

The Figure 1 map provides a good visual comparison of the two most important aspects of any short-term stock investment. There are other aspects of comparison that this chart sometimes doesn’t represent well, especially when it comes to general market prospects like SPY’s. Where questions about “how likely” are present in other comparative tables, such as Figure 2, can be helpful.

Yellow highlighting of the cells of the table highlights factors important for the valuation of securities and the security TSLA, the most promising of near capital gains as ranked in the column [R]. Red cell fillings indicate inadequate proportions of essential performance competition requirements, as in [H], [L-N] and [T].

Figure 2

detail comparative data

blockdesk.com

The price ranges implied by the day’s transaction activity are in columns [B] and [C]usually around the closing price of the day [D]. They produce a measure of risk and reward we call the Range Index [G]the percentage of the B to C prediction range that lies between D and C.

Today’s G’s are used for the daily forecast history of the past 5 years of each stock [M] pre-count and average [L] experiences. Fewer than 20 Gs or a shorter history of Ms are considered statistically inadequate.

[H] indicates what percentage of L positions were completed profitably, either at price ranges or at market close above the day after the predicted closing price entry cost. The net realization of all L’s is shown in [I].

[I] fractions are weighted with H and 100-H in [O, P, & Q] properly conditioned by [J] to give an investment ranking [R] in compound annual growth rates [CAGR] units of basis points per day.

Additional market perspective is provided by the more than 3,000 securities for which price forecasts are available. They are currently suggesting that while the market recovery is underway, it is still far from generally attractive.

On the other hand, the R column scores for TSLA and the top 20 predicted population support the primary candidate’s competitiveness. Toyota’s(TM) outlook falls far short of the leader, TSLA.

recent trends of price rfury fpredictions for TSLA

figure 3

daily trends of MM forecast ranges

blockdesk.com

(used with permission)

This is NOT a typical “technical analysis chart” of simple historical (only) observations. Instead, it depicts Market-Maker’s daily updated price forecasts, implied by real-time pledges of real capital, adjusted for the recent stock split.

The communicative value is present here through visual comparisons at each forecast date of the ratios of the upward and downward price change expectations by the market making community, as influenced by the actions of an interested and engaged large institutional investor community.

These forecasts are usually resolved in a time horizon of less than six months, and often in two months or less. It states that out of 111 previous forecasts like today’s, nearly 80 out of every 100 were profitable, completed in 36 market days (7 weeks) profitable with an average profit of +18%, a CAGR rate of 154%. No promises, just having fun with history.

Conclusion

Comparison of Market-Maker Short-Term Forecast Performance for Tesla, Inc. With similar predictions of other technologically active securities being pursued by investor references, it seems clear that this stock could be an attractive investment choice for investors pursuing short-term capital gain strategies.