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Tesla Motors Inc (TSLA): How Are The Bears Trading It?

At present, there are many facts and figures for Tesla Motors Inc (NASDAQ:TSLA) traders to keep an eye on, but it is key to take note of a stock’s short sellers. Two indicators typically used are: (a) the fraction of a stock’s float that the shorts are currently short selling, and (b) the change in short interest.

Tesla Motors Inc (TSLA) Gets Five-Star Rating: Should Ford Motor Company (F), Other Competitors Worry?

More short selling typically means what it implies: Wall Street has become less optimistic about a company. Overselling, however, sometimes has a bullish effect on stock price, as short-ers can be forced to buy their stock.

Within Insider Monkey, it is not a secret that we track hedgies’ interest, but it is eqaully as important to group this data with aggregate short data. A few, big time investors might disclose that they’re bearish on a company, but it’s not an SEC requirement. Nevertheless, many individual investors might wish to stay away from highly shorted equities with high hedgie investment, while others might desire short-squeeze plays. For traders looking for a market-beating piggybacking strategy, discover the details of our premium strategy.

With that in mind, let’s take a peek at the latest data surrounding Tesla Motors Inc (NASDAQ:TSLA).

Studying the most recent FINRA data, which is reported twice each month, we can discover that Tesla Motors Inc (NASDAQ:TSLA) has a short interest of 36.90% of float, down slightly from the previous month. With a total float of 74.15M shares, this is a short ratio of 2.70.

It is also crucial to take note of hedge fund sentiment from their 13F forms. When analyzing the funds we track, Drew Cupps’s Cupps Capital Management had the largest position in Tesla Motors Inc (NASDAQ:TSLA), worth close to $21.5 million, accounting for 2.2% of its total 13F portfolio. Coming in second is Route One Investment Company, managed by William Duhamel, which held a $18.9 million call position; 2.9% of its 13F portfolio is allocated to the stock. Some other hedgies that are bullish include Phill Gross and Robert Atchinson’s Adage Capital Management, John Griffin’s Blue Ridge Capital and Alexander Mitchell’s Scopus Asset Management.

Also, insider buying is most useful when the company in question has seen transactions within the past six months. Over the last half-year time period, Tesla Motors Inc (NASDAQ:TSLA) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

Let’s also review activity in other stocks similar to Tesla Motors Inc (NASDAQ:TSLA). These stocks are Honda Motor Co Ltd (ADR) (NYSE:HMC), Ford Motor Company (NYSE:F), Nissan Motor Co., Ltd. (ADR) (PINK:NSANY), General Motors Company (NYSE:GM), and Tata Motors Limited (ADR) (NYSE:TTM). This group of stocks are in the auto manufacturers – major industry and their market caps match TSLA’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Honda Motor Co Ltd (ADR) (NYSE:HMC) 6 0 0
Ford Motor Company (NYSE:F) 47 0 13
Nissan Motor Co., Ltd. (ADR) (PINK:NSANY) 0 0
General Motors Company (NYSE:GM) 110 2 5
Tata Motors Limited (ADR) (NYSE:TTM) 22 0 0

These three indicators–short interest info, hedge fund holdings and insiders’ behavior–are what every investor should account for. Although it is hard to discover a usable strategy from short sale filings, hedgie and insider sentiment give plenty of market beating opportunities if you know where to look.