5 Best Performing S&P 500 Stocks in the Last 10 Years

2. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 88

10-Year Share Price Gains as of January 18: 5,640%

Tesla, Inc. (NASDAQ:TSLA) is one of the best performing S&P 500 stocks in the last ten years, with shares indicating 10-year share price gains of 5,640% as of January 18. On January 17, Tesla, Inc. (NASDAQ:TSLA) stock climbed higher as more Street analysts observed the long-term upside of the recent price cuts even as short-term catalysts are limited due to the hit to margins. The general consensus is that market share gains could be dramatic if EV competitors struggle amid the new pricing environment.

On January 17, Jefferies analyst Philippe Houchois maintained a Buy recommendation on Tesla, Inc. (NASDAQ:TSLA) but lowered the firm’s price target on the shares to $180 from $350. While the analyst believes Tesla, Inc. (NASDAQ:TSLA) is leading the industry towards an improved business model, the trajectory is “bumpier than we would like.” 

According to Insider Monkey’s data, Tesla, Inc. (NASDAQ:TSLA) was part of 88 hedge fund portfolios at the end of September 2022, compared to 73 in the prior quarter. Cathie Wood’s ARK Investment Management is a significant position holder in the company, with 4 million shares worth $1 billion. 

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Tesla, Inc. (NASDAQ:TSLA) was one of them. Here is what the fund said:

“In 2014, before we began to invest in Tesla (NASDAQ:TSLA), I called Roger to ask whether he thought Elon Musk’s electric car business would succeed. I did not believe that Roger, an owner of dealerships that sell cars powered by internal combustion engines (ICE) would likely have a favorable opinion of Tesla’s prospects. That was principally for two reasons:

First, automobile manufacturing and distribution is unusually complicated, capital intensive, and highly regulated, which makes profitability problematic; second, cars with ICE motors require extensive annual maintenance, and dealer services revenues, not profits from automobile sales, are the most important contributor to profits of perpetual licensed ICE car dealerships.

Penske Automotive Group is principally an ICE car dealer. Since electric cars are powered by batteries and need little service, franchised dealerships are incented to sell ICE, not EV automobiles. Further, Roger had been a long-term director of General Motors. General Motors’ ICE automobile business would be disrupted if Tesla were successful. (click here to read more…)