Tesla Motors Inc (NASDAQ:TSLA) investors are buzzing right now following a tweet from Elon Musk regarding the production of the Model 3, the company’s new line of low-cost sedans. Musk wrote that production will start in approximately two years, once Tesla Motors Inc (NASDAQ:TSLA) has a fully functioning “Gigafactory” to produce the batteries for the vehicles. The company has also announced that the delivery of the Model X SUVs will start by the end of the month.
Tesla Motors Inc (NASDAQ:TSLA) has set a $35,000 price tag on the Model 3, which is set to be unveiled in March 2016, which is also when the company will start taking pre-orders. Such a late launch date is dictated by the company’s need to build its own battery factory, since at the moment, the batteries that would power the Model 3 cost as much as the car itself. Tesla Motors Inc (NASDAQ:TSLA), therefore, is building an immense lithium-ion battery factory that will allow them to install batteries at a much lower cost than the current going rate. Hedge fund managers Daniel Benton and Dmitry Balyasny hold significant positions in this stock, which we will analyze later in the article.
Professional investors like Balyasny and Benton spend considerable time and money conducting due diligence on each company they invest in, which makes them the perfect investors to emulate. However, we also know that the returns of hedge funds on the whole have not been good for several years, underperforming the market. We analyzed the historical stock picks of these investors and our research revealed that the small-cap picks of these funds performed far better than their large-cap picks, which is where most of their money is invested and why their performances as a whole have been poor. Why pay fees to invest in both the best and worst ideas of a particular hedge fund when you can simply mimic the best ideas of the best fund managers on your own? A portfolio consisting of the 15 most popular small-cap stock picks among the funds we track has returned 118% and beaten the market by more than 60 percentage points since the end of August 2012 (see the details).