The most recent low was at $12.28. We may or may not match that. In any event with a yield of close to 6% and a near perfect 6 year correction of about 2/3+, this stock looks like it might be a buy. It is alleged to have manipulated electricity prices and is under investigation for that. We doubt that much will come of it so this could be that low where it is a buy. Back in the 1980 this stock was trading just under $10 so you are looking at a long time low. See also previous blogs.
Clearly we got this one wrong. The wedge did not stop and just continued in a rather explosive way. Maybe we are in a 3d wave of sorts and still have a way to go. In the mean time there is an analyst who just doubled his target price to, I believe, $340. The fundamental thinking goes like this. This company makes cars, that industry is X billion worldwide so if they can command a certain miniscule fraction they will do very well. It is also, by way of the batteries – once enough of these cars have been built their batteries would hold a charge equal to the entire consumption of Mexico – a utility. That industry is a 10X billion industry and if the company can command just a small fraction, it will do very, very, well. Then they will also be in the forefront of electrical generation, by way of solar etc, which is a big and growing industry. If they can capture just a small fraction the company will do exceptionally well. You get the picture.
For the moment we still do not know who and how many are willing to fork over close to $100,000 for a car, even if it was recently nominated “best of breed”.
If at first …………..try again. A sell now,again. It trades at, for a software company, a modest p/e of 47x. This one could still trade $10 higher but that would make the B-wave abnormally large.
Back on July 9th we already liked the stock but thought it might still be missing the always elusive 5th wave. Well the timing was perfect even if the count, perhaps, was not. Now with the benefit of hindsight we have to assume that the 5th wave failed to make a new low (by about a dollar), or that the entire correction was already over and a new bull had started (that is a wave 1 followed by an irregular a-b-c wave 2). Either way the next up leg should be pretty robust. They are still selling beer, building planes and yachts and now even entire cars and the cost of electricity has gone up, so why not aluminum. A buy.