Is it a Wise Move to Still Buy Tesla, Inc. (TSLA) Shares?

Ariel Investments, an investment management firm, published its “Ariel Fund & Ariel Appreciation Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. For the three months ending December 31, 2021, Ariel Fund and Ariel Appreciation Fund lagged their primary value benchmarks. This was largely due to some weakness among our highest conviction consumer names. Still, Ariel Appreciation Fund solidly outpaced its core benchmark during the quarter and landed between the value and core indices for the full year. Meanwhile, Ariel Fund crushed both its primary and secondary benchmarks for the year. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Ariel Investments, in its Q4 2021 investor letter, mentioned Tesla, Inc. (NASDAQ:TSLA) and discussed its stance on the firm. Founded in 2003, Tesla, Inc. (NASDAQ:TSLA) is a Palo Alto, California-based vehicle manufacturing company with a $952.0 billion market capitalization, and is currently spearheaded by its CEO, Elon Musk. Tesla, Inc. (NASDAQ:TSLA) delivered a -12.83% return since the beginning of the year, while its 12-month returns are up by 39.11%. The stock closed at $921.16 per share on March 21, 2022.

Here is what Ariel Investments has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q4 2021 investor letter:

“Within four days in late December, Tesla, Inc. (TSLA)—a 1T— “…gained almost $200 billion in market cap…more than the equivalent of Ford Motor Co. and General Motors Co. combined.” Besides the epic demand for the products and services of these companies in a pandemic, low interest rates helped bloat growth stock multiples—putting a dollar earned in the future on equal footing with one earned today. Against that backdrop, as Barron’s acknowledges, “…investors might as well park money in promising companies whose cash flows won’t ramp up for years.”

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Our calculations show that Tesla, Inc. (NASDAQ:TSLA) ranks 26th on our list of the 30 Most Popular Stocks Among Hedge Funds. Tesla, Inc. (NASDAQ:TSLA) was in 91 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 60 funds in the previous quarter. Tesla, Inc. (NASDAQ:TSLA) delivered a -1.85% return in the past 3 months.

Earlier this month, we also shared another hedge fund’s views on Tesla, Inc. (NASDAQ:TSLA) in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

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