Tesla Is the New Apple: Najarian; Any mention of the electric car industry leader’s stock in a favorable light is met by the sneering contempt unique to bears

Tesla Is the New Apple: Najarian

By Jeff Macke | Breakout – 17 hours ago

Tesla’s (TSLA) stock has done nothing but make people money but you wouldn’t know it from the Twitter-sphere. Any mention of the electric car industry leader’s stock in a favorable light is met by the sneering contempt unique to bears. Sure there are devotees but for the most part Tesla is regarded as a stock for cult-members, not investors. “If you talk positively about Tesla you’re some sort of fiend,” says OptionMonster’s Jon Najarian. “There are so many haters… you can see it by the 30% short interest.” In that sense Najarian says he hasn’t seen such instinctive contempt for “cult-ish” shareholders since the days when Steve Jobs was running Apple (AAPL).Comparing Tesla creator Elon Musk to Steve Jobs isn’t a new idea, but it’s hard to find many parallels to Musk among living CEOs. In fact there are those who don’t think Jobs is worthy of being held in the same regard as Jobs.

One key difference is that Apple never seemed particularly overvalued and obviously it’s hard to make a strictly fundamental case for Tesla. Like Facebook (FB), Tesla is unquestionably winning a race where the stakes are assumed to be large yet unknown. Facebook has a leading position in understanding users’ social network but no one really knows what such information is worth. Tesla has pole position in the electric car industry. All they have to do now is prove there will be an electric car industry in five years.

Tesla is up nearly 400% so far in 2013. There’s a reason the self-defined sophisticated traders are so skeptical. With a market cap of more than $20 billion Tesla seems to have priced in a significant amount of optimism. For the sake of quick comparison, Tesla trades at 15x trailing 12-month sales; more than 30x higher than the price-to-sales valuation of Ford (F).

After the run it’s had it’s all but impossible to make a case for chasing Tesla shares but that doesn’t mean the shorts won’t get squeezed out of their positions before the top. “It is ahead of itself,” concedes Najarian, “but I don’t think the shorts are going to be right.”

When it comes to betting against cult stocks, being “wrong” and being early are the same thing.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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