Retirement Stock Portfolio: 5 Safe Energy Stocks to Consider

1. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 88   

Tesla, Inc. (NASDAQ:TSLA) designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems. It is one of the major safe energy stocks for a retirement stock portfolio. On October 31, Tesla held preliminary talks with Glencore about taking a stake as large as 10% to 20% in the Swiss commodities trading and mining giant. On October 25, Cathie Wood of ARK Invest said that she believes Tesla could expand the market 10 times with a cheaper electric vehicle. 

On October 20, Oppenheimer analyst Colin Rusch maintained an Outperform rating on Tesla, Inc. (NASDAQ:TSLA) stock and a price target of $436, noting that the company delivered third quarter results that were slightly better than expectations.   

At the end of the third quarter of 2022, 88 hedge funds in the database of Insider Monkey held stakes worth $7.4 billion in Tesla, Inc. (NASDAQ:TSLA), compared to 73 in the preceding quarter worth $7.2 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…)

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