Here’s Why Tesla (TSLA) is a Relative Detractor from Polen Focus Growth’s Performance

Polen Capital, an investment management company, released its “Polen Focus Growth Strategy” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The market turned volatile in the third quarter. In the third quarter, the fund returned 3.21% (gross) and 2.99% (net) compared to 3.19% for the Russell 1000 Growth Index and 5.89% for the S&P 500 Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Polen Focus Growth Strategy highlighted stocks like Tesla, Inc. (NASDAQ:TSLA), in the third quarter 2024 investor letter. Tesla, Inc. (NASDAQ:TSLA) designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems. The one-month return of Tesla, Inc. (NASDAQ:TSLA) was 59.40%, and its shares gained 47.42% of their value over the last 52 weeks. On November 11, 2024, Tesla, Inc. (NASDAQ:TSLA) stock closed at $350.00 per share with a market capitalization of $1.124 trillion.

Polen Focus Growth Strategy stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q3 2024 investor letter:

“The largest relative detractors during the quarter were Apple, Airbnb, and Tesla (not owned). We’ve spoken at length about our rationale for not owning Tesla, Inc. (NASDAQ:TSLA). In short, the market seems to be pricing in a lot of positive optionality for this company in the near-to-intermediate term (and particularly a fully autonomous fleet of electric vehicles in the medium term). What exists today is an automobile manufacturer limited to the higher-income segment that is increasingly challenged to sell vehicles when interest rates are not zero. We continue to question the company’s long-term growth profile and governance.”

Best EV Stocks Under $50

Tesla, Inc. (NASDAQ:TSLA) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 85 hedge fund portfolios held Tesla, Inc. (NASDAQ:TSLA) at the end of the second quarter which was 74 in the previous quarter. While we acknowledge the potential of Tesla, Inc. (NASDAQ:TSLA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed Tesla, Inc. (NASDAQ:TSLA) and shared the list of stocks will go higher in Trump presidency according to Jim Cramer. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.

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