5 Mad Money Stock Picks This Week

2. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 91

On February 27, Jim Cramer said in a tweet, “This could be explosive! Buy Tesla.” He said this while retweeting an advert for Cathie Wood’s interview on “Squawk on the Street.” In January, Jim Cramer in a program noted Tesla, Inc. (NASDAQ:TSLA)’s strong earnings and credited them for the broader market’s gains.

On March 6, Tesla, Inc. (NASDAQ:TSLA) made headlines after it was reported that the company slashed prices for Model X and Model S.

At the end of the fourth quarter of 2022, 91 hedge funds had stakes in Tesla, Inc. (NASDAQ:TSLA). The total value of these stakes was about $5.9 billion.

Baron Partners Fund made the following comment about Tesla, Inc. (NASDAQ:TSLA) in its Q4 2022 investor letter:

“Tesla, Inc. (NASDAQ:TSLA) declined 54% in the quarter and detracted 26.62% from the Fund’s overall performance. We initiated our position in Tesla in February 2014 at a split-adjusted price of $11.91. Over the subsequent two years, we acquired 16.65 million shares for an average split-adjusted price of $14.22. At the time of our final purchase in February 2016, the stock represented 9.6% of the Fund’s total investments.

Tesla produced approximately 35,000 vehicles in 2014, the year of our initial purchase. In 2022, it produced 1.37 million vehicles. Not only has its production grown tremendously, but it has also significantly increased profitability per vehicle. Tesla has expanded from producing high performance electric vehicles for wealthy aficionados to a company that produces affordable luxury cars for a sizable audience. In turn, it has transformed its industry. Investors rewarded this expansion in both production and profits, and the stock price increased to $265.25 at the end of the third quarter. Since 2016, we sold 4.5 million shares, or 27.0% of the original holding, at an average price of $218.39.

Investors have recently become concerned about many external factors. Elon Musk is Tesla’s founder and CEO. His purchase of Twitter has negatively impacted the perception of Tesla’s brand in the short term. China’s COVID policies and outbreak have paused purchases and production in the company’s largest region. Global recessionary fears and upcoming Inflation Reduction Act incentives also caused some to delay new vehicle purchases in various markets…” (Click here to read the full text)