In today’s market place, there are many tools for Tesla Motors Inc (NASDAQ:TSLA) traders to track, but it’s key to monitor a stock’s short interest. Some metrics typically used are: (a) the chunk of a stock’s float that bears are currently selling, plus (b) the difference in short interest.
Heightened short selling usually indicates what it implies: Wall Street has turned less fond of the stock. Short selling that’s too high, though, may have a positive effect on share price, as short-ers can be forced to buy their positions.
At Insider Monkey, it is not a secret that we track hedgies’ interest, but it is also beneficial to group this data with overall short data. A few, large investors could indicate that they’re bearish on a certain stock, but it’s not an SEC requirement. Nonetheless, some individual investors may want to avoid heavily short sold companies with high hedge fund interest, while others may desire short-squeeze opportunities. For traders looking for a time-tested piggybacking strategy, discover the details of our premium strategy.
Without further ado, let’s take a glance at the key data swirling around Tesla Motors Inc (NASDAQ:TSLA).
Analyzing the most recent FINRA data, which is reported twice every month, we can see that Tesla Motors Inc (NASDAQ:TSLA) sports a short interest of 25.3% of float. This represents a change of more than 11 percentage points from the prior filing, which lends credence to the widely held theory that much of Tesla’s recent appreciation has been the result of a short squeeze. With a total float of 73.09M shares, Tesla now has a short ratio of 2.70, and its days-to-cover ratio (1.17) is less than one-seventh what it was just one month earlier.
It is also beneficial to keep an eye on hedge fund sentiment from their 13F filings. When analyzing the funds we track, Cupps Capital Management, managed by Drew Cupps, holds the biggest position in Tesla Motors Inc (NASDAQ:TSLA). Cupps Capital Management has a $21.5 million position in the stock, comprising 2.2% of its 13F portfolio.
In the second spot is Route One Investment Company, managed by William Duhamel, which held a $18.9 million call position; the fund has 2.9% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions 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 trading activity, especially when it’s bullish, is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the latest six-month time frame, Tesla Motors Inc (NASDAQ:TSLA) has experienced zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
Let’s check out 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), General Motors Company (NYSE:GM), and Tata Motors Limited (ADR) (NYSE:TTM). This group of stocks belong to the auto manufacturers – major industry and their market caps resemble 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 |
| General Motors Company (NYSE:GM) | 110 | 2 | 5 |
| Tata Motors Limited (ADR) (NYSE:TTM) | 22 | 0 | 0 |
The aforementioned indicators–short interest info, hedge fund holdings and insiders’ behavior–are something every investor should pay attention to. Though it’s difficult to find a usable strategy from short selling data, the latter two provide plenty of market beating opportunities if you know where to look.
