1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 72
Tesla, Inc. (NASDAQ:TSLA) is one of the largest renewable energy companies in the world. While the firm is primarily known for its cars, it also sells solar energy generation and storage products to commercial, residential, and industrial users.
Tesla, Inc. (NASDAQ:TSLA) is one of the leaders in the battery energy storage space, as the company has a myriad of software products that cater to its customer needs. These include options such as Autobidder, Powerhub, and Microgrid Controller, which target users such as utilities and homeowners, Tesla, Inc. (NASDAQ:TSLA)’s second quarter was also the first time that the company posted a gross profit from its energy generation and storage segment through a massive 41% annual growth.
Canaccord raised Tesla, Inc. (NASDAQ:TSLA)’s share price target to $881 from $815 in August 2022, as it stated that the company’s solar and energy offerings will ensure that it remains a “sustainability behemoth”. For their June quarter of 2022 holdings, 72 out of the 895 hedge funds part of Insider Monkey’s research had invested in the company.
Out of these, Catherine D. Wood’s ARK Investment Management is Tesla, Inc. (NASDAQ:TSLA)’s largest investor. It owns 1 million shares that are worth $1 billion.
Baron Funds mentioned the company in its Q2 2022 investor letter. 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.
Regardless, I was right to have spoken with Roger. That was since he outlined numerous issues we needed to consider, study, and question before we determined whether we believed Tesla could be a successful business…before we ultimately chose whether to invest in that company.
When we completed our initial due diligence on Tesla, which diligence has been ongoing since 2014, we decided to invest $360 million in Tesla over the next two years. I then called Roger and outlined why I thought we could earn 20 times our capital over the next 10 years. Roger was so certain I was wrong that he offered to bet me $1 million that Tesla would fail. “Roger, I can’t bet you a million dollars. First, if you are right, I couldn’t afford to pay you. Second, if I’m right, you’re my friend, and I couldn’t take your money.” We settled on a dinner bet…” (Click here to see the full text)
Disclosure: None. You can also take a look at 7 Best Stocks to Buy According to Stephen Feinberg’s Cerberus Capital Management and 10 Utilities Stocks with Over 3% Dividend Yield.
