Tesla Motors (NASDAQ:TSLA) stock finished higher this week, outperforming the S&P 500's gain of 1.8% with a 2.4% rise. Bringing together the most important Tesla-themed analysis and headlines, here's your latest weekly roundup on Elon Musk's electric car company.
Reaffirming the Model S safety rating
The week's biggest news came on Monday after market close. Despite its unresolved investigation into Tesla Model S battery fires, the National Highway Traffic Safety Administration apparently is confident enough in the Model S to reaffirm its perfect five-star safety rating for the car, along with its five stars in every subcategory. Even more, NHTSA says the 2014 Model S has the highest safety rating in America, according to Tesla's press release.
The news was likely the biggest driver of Tesla's gain during the week. The stock jumped 5% on the news on Tuesday when the market opened. The move to reaffirm the rating suggests that NHTSA likely hasn't developed any conclusions on its investigation into battery fires that would result in a major recall.
Major over-the-air update
Again displaying the impressive usefulness of Tesla's software updates, often referred to by the company as over-the-air updates, Tesla rapidly addressed a garage fire that Tesla claimed resulted from problems in the receptacle (and not from the charging system or battery of the Model S) with a simple update.
One analyst wants to play the timing game
Serving up some anti-Foolish advice, R.W. Baird senior analyst Ben Kallo suggests Tesla shareholders take their profits and look for a pullback to around $100 to buy again, according to CNBC. Meanwhile, he has a $187 price target on the stock. Why does he so confidently expect a pullback despite his price target? "I think demand isn't an issue at all," he said. Instead, he's worried about how rapidly Tesla will be able to ramp up production. This could result in some choppiness in the stock price in the short term, says Baird.
Investors would be wise to ignore his advice. Timing the market has never been easy, and he probably doesn't boast a secret crystal ball. There are too many other factors that could drive the stock in different directions in the short-term. For instance, one surprising bullish forward-looking statement from Tesla could easily alter investor outlook and today's stock price -- and Tesla is likely to share 2014 guidance when it reports fourth quarter results, so this is a realistic scenario.
Case in point: The best way to invest is to simply decide whether you think a stock is worth holding for the long haul and don't sell until your underlying thesis for owning the business has been altered for the worse -- enough for you to no longer believe the business is worth its current price.
Musk makes his case for solar power
It's no secret that Tesla CEO Elon Musk is also the CEO of publicly traded SolarCity (NASDAQ:SCTY). Undoubtedly his obvious endorsement of solar power suggests he believes solar power will provide a larger portion of electricity in the future, making electric cars even greener. Thanks to a tweet from Musk last weekend that pointed to a detailed article on solar power progress, we now have a better idea at the reasons he is so confident in solar power as a future source of sustainable energy.
This is why I think solar power will be the primary long term solution http://t.co/WNa12OVj5P— Elon Musk (@elonmusk) December 21, 2013
Of the several solar power developments illustrated in the article, here were some of the more notable points:
- "[Y]early energy potential from sunshine dwarfs total energy potential from any other source."
- Growth in solar power is basically happening at an exponential pace, with capacity growing from just 2.2 GW in 2002 to 100 GW in 2012.
- The price for solar panels is falling rapidly -- "about 100 times over from 1977 to 2012." Even since 2008, the price for solar PV panels has fallen about 80%.
The week's most important news for Tesla shareholders was undoubtedly NHTSA's reaffirmation of its record safety rating for the Model S. It signals a Model S recall is unlikely.
Going into 2014, I believe Tesla is one of the best opportunities in the market. Find out why here.
Fool contributor Daniel Sparks owns shares of SolarCity and Tesla Motors. The Motley Fool recommends and owns shares of SolarCity and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.