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The analyst in question, David Tamberrino, ranks 10,337 out of 10,667 on TipRanks, meaning he is one of the worst analysts and has been wrong all the time. Link
by tonylo 9y ago
The analyst in question, David Tamberrino, ranks 10,337 out of 10,667 on TipRanks, meaning he is one of the worst analysts and has been wrong all the time. Link: https://www.tipranks.com/analysts/david-tamberrino https://www.tipranks.com/analysts/david-tamberrino
Those who keep repeating that Tesla stock is "overvalued" should understand that a stock's "value" is based on the current value of all future cash flows. Ford and basically all the other incumbent car companies are generating profits now, but are stagnant and waiting to be disrupted. Meanwhile Tesla's revenue is $7B last year, will be $10B+ this year, $20B+ next year, and $60B in 2020. Which companies are overvalued and which would you rather own?
There's a reason Wal-Mart's top and bottom lines are both several times that of Amazon, yet Amazon is now worth twice as much as Wal-Mart. It's about growth and future addressable market.
- was_boring 9y agoIf TipRanks is accurate, how can this person be employed? Especially at a firm like GS.
- sillysaurus3 9y agoBy the pigeonhole principle, someone has to be at the bottom.
- schrodinger 9y agoThat someone doesn't have to be at GS though.
- williamscales 9y agoWell yes, but one doesn't necessarily expect the same individual to stay on the bottom. Reason dictates that an analyst would either improve or exit the pool instead of continually failing (why would a firm hire a persistently wrong analyst?) So someone has to be at the bottom, true, but I think it's odd for someone to stay at the bottom.
- QML 9y agoHow does the pidgeonhole principle apply to rankings?
- Vintila 9y agoI think he means the well-ordering principle
- keltex 9y agoOr that GS wants to move the stock in a certain direction. Perhaps they have a big short position and want to cover. They don't have to be right in the long term, just right enough to move the stock down 7% and make money.
- poizan42 9y agoIsn't that stock manipulation?
- scient 9y agoYou say that as if they would be punished for that. And its not like they do this all the time...
- ethan_g 9y agoResearch and trading have strong information barriers, to avoid just the sort of thing you're suggesting. Banks enforce this very seriously. Search for "Global Analyst Research Settlement" if you want the history.
- PhantomGremlin 9y agoSure. Next you'll tell us that nobody does insider trading, because, to riff from Richard M Nixon: "we can do that ... but it would be wrong".
- nabla9 9y agoMost analyst's are little more than marketers. Nobody gives good analysis for free.
- MarkMc 9y agoSomebody whose predictions are 100% wrong all the time would be enormously valuable - you just bet on the opposite outcome of the prediction ;) More seriously, the TipRanks performance timeline is only over 1 year. Perhaps GS is judging him on a much longer timeline.
- mhb 9y agoMaybe they don't base their hiring on the employee's DCF to the firm.
- zanny 9y ago> but are stagnant and waiting to be disrupted The other car companies are rapidly developing their own electric cars. See the Chevy Bolt and Nissan Leaf for mid-level and entry-level examples. Who says they will not disrupt themselves? These are huge incumbents with large R&D budgets who always look for ways to one up the competition. There is a very limited window of opportunity from an outsider where the insider industry misses something obvious, but that isn't frequent. In most cases, what is called disruption is either breaking laws or ignoring some fundamental problem the incumbents think too important to ignore. They test assumptions, and (rarely) prove them invalid, but the intent to disrupt alone shouldn't make for such enormous PIs.
- crush-n-spread 9y agohuge incumbents with large R&D budgets who always look for ways to one up the competition One up the competition? These car companies introduce new plastics or fender flares and call it "All-new". That's how they compete, body styling and incremental change. Every single incumbent car company is incredibly slow moving and reluctant to create change, because each one of the low-motivation engineers in the chain of command is reluctant to work. "One up the competition", seriously...
- mehwoot 9y agobecause each one of the low-motivation engineers in the chain of command is reluctant to work Possibly the laziest analysis I've ever seen
- crush-n-spread 9y ago1. It is a fundamental human trait to not expend energy when it is not required, and that includes engineering effort. 2. Engineering effort is not required for Ford to continue to be able to pay their engineers a living wage, as they could live off of their current product line for the next decade. Combine 1 and 2 and surprise, you have lazy engineers.
- TheSpiceIsLife 9y ago
- austenallred 9y agoTo quote Marc Andreessen: "A few common fallacies about valuation of public and private technology companies: First, ask any MBA how to value tech companies, she'll say "discounted cash flow, just like any other company!" Problem: For new & rapidly growing tech companies, up to 100% of value is in terminal value 10+ years out, so DCF framework collapses. You can run as many DCF spreadsheets as you want and may get nothing that will help you make good tech investment decisions. Related to fact that tech co's don't have stable products like soup or brick companies; future cash flows will come from future products. Instead, smart tech investor thinks about: A future product roadmap/opportunity, B bottoms-up market size & growth, C talent and skill of team. Essentially you are valuing things that have not yet happened, and the likelihood of the CEO and team being able to make them happen. Finance people find this appalling, but investors who do this well can make a lot of money. Spreadsheet investing is often disastrous. Doesn't mean cash flow doesn't matter, in fact opposite: this is the path to find tech companies that will generate tons of future cash."
- 11thEarlOfMar 9y ago> Instead, smart tech investor thinks about: A future product roadmap/opportunity, B bottoms-up market size & growth, C talent and skill of team. Essentially you are valuing things that have not yet happened, and the likelihood of the CEO and team being able to make them happen. This thinking is what led me to buy GOOG(5x), TSLA(12x), NFLX(7x), YELP (ouch) and LC (oucher). I am buying what I believe the company will become, not what the company is. It's risky, and only a portion of my portfolio goes into these high-risk investments. Much of the rest is in mutual funds. MBAs might do a little better in income investing for dividends. It's a totally different view, but investors need to understand that as well when it comes time to transition from growth to income stocks.
- weston 9y agoYou could also invest in the Vanguard Information Technology ETF (VGT) fund, which is an ETF of 365 tech stocks.
- JumpCrisscross 9y ago
- jorvi 9y agoJust an aside, but why am I never hearing about RBC capital? 10 of the top 25 analysts (on TipRanks) come from there, with the second place (Oppenheimer) only coming in with 3. That's a mammoth gap!
- tanderson92 9y agofwiw, Brad Katsuyama of Flash Boys fame worked at RBC (RBC capital is the IB part)
- MarkMc 9y agoThe TipRanks performance timeline is only 1 year. There are some short-term arbitrage-like opportunities available at this scale, but most opportunities are longer term - when the market has mispriced fundamental long-term value. I wouldn't be surprised if next year RBC capital has no analyst in the top 25.
- pdog 9y ago> Those who keep repeating that Tesla stock is "overvalued" should understand that a stock's "value" is based on the current value of all future cash flows. I'm pretty sure all the people saying it's overvalued understand precisely that.
- Aloha 9y agoTesla is a technology company that also happens to make cars. Ford is an automotive company, that also happens to make technology. Lets talk about models - Tesla doesnt make a mass market car - even their basic sedan, starts at 35k - I can buy a nicely equipped Taurus, Fusion, Malibu , Impala, Camry or Avalon for less than that - and from a size perspective its far closer to a Prius or Volt (23k or 33k starting respectively). Secondly, Brand Cachet - Tesla appears to be positioning itself from a branding perspective closer to where BMW or Audi does. I'm more hopeful for Ford figuring out technology, than I am with Tesla figuring out how to be a really good mass market car company. The reason I consider Tesla overvalued has to do with potential market share, as well as the traditional margin on cars - if they try to be a mass market manufacturer, I don't see Tesla capturing more than 10% of the (very crowded) marketplace nor do I see them easily besting the historic 5% margin most (mass market) automakers have, if they decide to be more like BMW or Audi - their margin could go up by a rather large amount - but their volume would go down by an almost an large amount... they might however have a bright future as a technology licensing company - that remains to be seen. In short however, if you measure it by the "car company yardstick" its drastically over overvalued - if you measure it by the "technology company yardstick" however the numbers start to look a little friendlier. Consider though that the technology company yardstick seems to be mostly based on hype, rather than actualized returns basis. Consider for a moment that Tesla isnt pioneering a new market here, it's trying to produce a better dohicky (thats really cool, but not revolutionary) in an already crowded market - this alone says that the technology yardstick shouldn't apply - you should instead measure it like its peers in that industry.
- twblalock 9y agoI don't think many of the major car companies are going to be disrupted too badly. They have massive scale compared to Tesla. Electric car technology is already mostly commoditized, and once these companies scale up production, they will manufacture huge numbers of electric cars. Self-driving technology is going to become commoditized also -- it may be Google/Waymo/Apple who invent the technology, but the large established car companies are going to be the ones cranking out millions of self-driving cars. The car companies that are going to be in trouble are the smaller ones who are still committed to old-school gasoline cars, such as Mazda and Subaru. They don't have the engineering resources to keep up with the others. Most of the other major companies know what is coming and are preparing to deal with it.
- wbl 9y agoSubaru has a market segment that needs the range of gasoline.
- ams6110 9y agoSubaru and Toyota also share manufacturing, as do Ford and Mazda.
- Tiktaalik 9y agoWith the niche guys like Mazda I figure they could be able to work closely with bigger companies. Already it seems that car companies do this a fair bit. The new Fiat and Miata have basically the same innards for example. I could imagine that in the future the big car companies aren't going to be that interested in making a small electric sportscar, but they could partner with Mazda to make a Miata electric.
- JKCalhoun 9y agoElectric Miata? Would buy!
- PhantomGremlin 9y ago
- samstave 9y ago<tinfoil> Don't you think that GS could be artificially ensuring the stock drops so they can buy it lower?? I've never seen a GS dealing I didnt think shady shit was going on... They farked FB, they farked greece, and the rest of the woorld in 2008-09, etc... GS are not known for giving a shit about the financial well-being of anything other than their own... </tinfoil>
- skinnymuch 9y agoIt'll be pretty incredible if Tesla gets close to $50B in rev in 2020. I'm a huge homer for Tesla and I'm thinking they'll be like $50B in 2020. Many people still won't be convinced of Tesla's place. But that's how things go.
- dis-sys 9y ago"meaning he is one of the worst analysts and has been wrong all the time" If that is the case, then his comments is actually consistently reliable - you can always take the opposite of what he says and pocket the money.