Tesla may be enjoying its success for now, but some analysts believe that, based on history, stocks which double in under six months are bound to take a tumble at some point. Bernstein analysts pointed out historical data on similar cases, something investors may want to take into consideration.
In a report from CNBC.com, Bernstein analyzed 40 years of trading data with stocks holding market values of $20 billion. The surge of Tesla shares to more than 100-percent in the last six months is something, and the firm wanted to give investors a bigger picture of what the future holds.
“The track record is mixed – on average, large caps that doubled in the last 6 months subsequently saw a forward 6-month absolute return of just 2.6%,” Bernstein analyst Toni Sacconaghi said.
It would be best to note though that the claim excluded some things. This included time periods of high growth, such as the tech bubble some years back and recovering from the Great Recession. Bernstein noted that this happened three times a year. Tesla shares rose 7% in Tuesday trading to close at $547.20.
The surge in Tesla stocks has been deemed extremely unusual in the automobile and industrial sectors, Marketwatch.com noted. It has risen by 190-percent since June, something that has left many investors baffled. Tesla plans to report its fourth-quarter earnings of 2019 on Jan.29, something that could help shed light on the sudden rise of the American automotive and energy company based in Palo Alto, California. Expected to be included are the adjusted earnings of $1.65 a share on sales of $6.9 billion.
The recent stock jump of Tesla comes at a time when a petition was filed by US safety regulators on the alleged sudden acceleration of Tesla vehicles. This includes its best-selling Tesla Model S, which made headlines recently when a vehicle crashed in Pleasanton.
As mentioned in a previous post, a man was killed in that crash. The Tesla Model S hit a traffic signal pole and cement wall after the driver reportedly lost control of the vehicle that ended up in flames. Even before the accident, there were already reports of about 110 crashes and 52 injuries last year.
The National Highway Traffic Safety Administration is already investigating roughly 500,000 Tesla vehicles that include the Model S, Model X, and Model 3. Tesla has yet to release an official statement on the issue. However, the sudden stock fluctuation may temporarily shift the attention in another direction.
