Cory Diary : Tesla Q4'21 Earning Call

The call basically is funny. Elon being himself like an engineer do not want to say what the analysts want to hear. They were looking for roadmap and near term but he talking production issues, no CyberTruck, and then he go on with his vision of FSD, RoboTaxi, Humanoid .... haha

Here's a quick summary and what he meant I believe in his calls.

Highest operating margin in the industry. Another Gross Margin High and Production High despite continue Supply chain constraints. And this will continues to Year 2022. This shake those analysts who register a big issue. But to Elon he has same issue in 2021 too and we have record quarters. The fact of matter is Elon expects 50% growth in Year 2022. I think likely more. Even at 50% this is phenomenon growth and profits for year 2022. And this can be met by Fremont and Shanghai Giga factories alone since is still under utilized due to supply chain issue which every company in the world facing too. 

And to Elon minds because of part shortages and super high demand in Model 3 and Model Y, why the heck we need a roadmap or Cyber Truck at all. No additional Model needs to be delivered as it does not make sense since not enough parts even to meet current demand. This is super bull case for supply chain management.  New model needs new expensive production tool, factory learning and will be taking away parts from M3 and MY. Total output will decrease if they focus on new vehicles. He will have new models RD ready if production needed.

Texas and Berlin started production last Q. Focus now on volume production. New factory towards end of this year. To me this is like bonus. If world wide supply chain improves, bang ! we going to have a super quarter.

He aren't doing 25k compact car. Which is quite obvious. Parts are critical now. Why on earth we want to put them in a cheap product. Certainly this going to premium cars for better margins.

Elon expects FSD this year. Maybe possible. He then talked about future robot products. I think this is his hope not immediate future. He even go on about Humanoid. Personally I find it impossible to achieve even in next 5 to 10 years. Is more like a smokescreen. This aren't important unless we set our price target that we invest today is $10k ....

And for the PE matters. It has dropped to PE 83 @ $850. This is using very conservative estimate of  annualized non-growing numbers which is 850/2.54 x 4. Super quarter Tesla riding on cash cow train.

Elon being Elon do what's matter logically. That's why he is the world richest man incidentally and able to do mission impossible in SpaceX.

Cory

2022-0129

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Cory Diary : US Market Update - Capital Preservation

The Market seems shaky recently. What I notice is that PLTR results was fantastic but sold down like -30%. Another stock is SE which is around -22% at time of typing from ATH. The recently listed RIVN hits high of 172 and now trading around -29% within 2 weeks. All of them are not profitable in term of EPS. Unfortunately I am stuck in PLTR. Ouch.

From the Chart of MSFT, there is a recent steeper climb which is quite obvious in 1 year time frame since End of Sept'21.  Keep having this in mind on potential pull back though time frame is hard to determine. The climb of the stock has been slow appreciation, so my take is the portfolio will not lose much if it keeps climbing at that pace short term.

Meta Platforms PE is not expensive. However Metaverse is a few years project. We can monitor and see how the connect world progress. It is an interesting frontier but for short term we need not be tied to it at current market sentiment especially with possible tapering by Fed.

On another front, I noticed Netlink BNB Tr which I have is up 0.01 despite just Ex-dividend recently. This counter usually a place for fund to hide and the appreciation is really slow if any. For it to maintain and increase after Ex-dividend means something. In addition, many of the strong local reits seems in flat mode despite cheap valuation. Another data point to add.

Finally, I am quite Bull on Tesla and maybe some on AMD. Just averaged up again on Tesla and this kind of depleted the war fund. Therefore, decided to sell Meta Platforms and Microsoft. Hold PLTR ( temp) , TSLA and AMD. Do note some profit was taken off the table on AMD earlier. In this way, initiated Capital Preservation while ensuring able to ride well with TSLA or even average up as needed.

ah ! I can Sleep Well now.

Cheers

Cory

2021-1124

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Cory Diary : Tesla Q3 2021

That's for Period of Jul, Aug and Sept.

Tesla Deliveries below. Basically we track Cars as the company is on execution phase. The tech is already developed. The company do many other important stuffs (other than cars) but I would classify them as bonus for simplicity. So as we can see, another wonderful result. Do you know another fact, this figures are known before the result. ( Hint ! ) Not sure why but it is what it is.

Key Development

Basically the factories of-course and we can see this will cover next few Qs of production increase.

Key Metrics

For EPS 1.86 is now roughly driving PE of 120 Only ! We can try use 1.44 (Non-GAAP) and it will be PE 156 if we view stock based compensation. Assuming Stock Price 900.

Company Strategy

Over a multi-year horizon, they expect to achieve 50% average annual growth in vehicle deliveries.

My Brief

Tesla just has to continue executing their production well and we will ride the growth story. In my earlier post (link)  I mentioned Tesla PE has came down significant as it is on growth path. PE 1200 is not reflective of the ground situation. That time PE is already down to 175. Now is 120. Can we imagine what will be the next PE in next Q report and the next after ? Seem like no brainer ? What is the risks ?

Cory

2021-1022

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Cory Diary : Microsoft Corporation (MSFT)

When first start US stock investment this year it feels like after a major battle already won and we are going over what's left of pockets of resistance. There's nothing much to left to take. And if things turn bad, we got more to lose. Many technology stock after Year 2020 Covid have significant capital gain. This becomes a problem as there is element of FOMO ( Fear of Missing Out ) phenomenon that could left late investors carrying the elevated price.

We could wait for price correction which may not happen based on S&P500 hundred years performance. To not learn from this Year 2020 mistake of not investing in US stocks specifically Tech Stock is a non-starter from Growth and Covid perspective.

To overcome this, Microsoft fits the bill in that the stock climbs in a gentle and consistent manner. Of-course this is after some deliberation I did on the basic fundamentals of the company. ( MSFT ). Interestingly on data level, just the PE. Since then after my first lump sum investment, it has already registered almost 25% gain ytd. This is not common for a dividend investor who aren't use to seeing such growth in gains and that's exactly what we want our portfolio to have in diversification. Unfortunately I am so pre-occupied with so many things that I lack the conviction to build on it.

Nevertheless, it has grow to 1.7% of portfolio allocation. Potentially I could still build on it slowly with some injections on a portion of cash excess whenever necessary. There's few things to watch unlike Index ( country level ) which is that Microsoft still has to have an edge in their businesses.

Maybe investing is that simple. dude.

Cory

2021-0814

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Cory Diary : Tesla 2021 Q2

Tesla

Spectacular Result from Tesla yesterday. Best Quarter so far.

YOY

Net Income 1.4B from $104M

Non-GAAP earnings per share of $1.45 ahead of $0.98 expectation

Revenue rose 98% to $11.96 billion, from $6.04 billion a year ago

Operating cash flow of $619M

Produced 200k Vehicles

Operating Margin of 11%

Bitcoin-related impairment of ($23 million)

Solar and energy storage business rakes in $810M Rev. 116% from same Q last year.

The business is damped by ...

The chip shortage “remains quite serious,” Chief Executive Elon Musk said in a call after the results. “The chip supply is fundamentally the governing factor on our output,” and it’s hard to say how long it will last because it’s out of Tesla’s control, he said.

 “To better focus on these factories, and due to the limited availability of battery cells and global supply chain challenges, we have shifted the launch of the Semi truck program to 2022,” it said.

and today by Chinese Tech and Education Stocks sell down. Tesla PE has come down from 1200 range many months ago to less than 175 ! with it's  growth. That's how amazing the business ability to scale.

Took the opportunity to do a little DCA on Tesla Shares in a Sea of Red Tides. 

Cory

2021-0728

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

Cory Diary : Growth Stocks

One thing I learned from 2020 is that we are who we are. They are people who can invest just 6 stocks with solid returns. There are ones who only need to do 1 with 500% returns. Everyone situation is different and so are capability. If we are to blindly follow the setup of others we will always be chasing the "dragon" in the cloud and capture nothing.

After years mainly in Dividend Investing, the magnificent rise in growth stocks tell me there could be opportunity that I can learned from it. Some of this growth tocks have widely diversified market and moat. So is not exactly just Growth. A good example is Microsoft where their applications are widely available to PC users. They are basic productivity tools we can't do without.

Microsoft from Wiki

Products

List of software : Windows, Office, Servers, Skype, Visual Studio, Dynamics, Xbox, Surface Mobile

Services

Azure, Bing, LinkedIn, Yammer, MSDNa Office 3652, OneDrive, Outlook.com, GitHub, TechNet, Pay, Microsoft Store, Windows Update, Xbox Game Pass, Xbox Live

Investments

https://en.wikipedia.org/wiki/List_of_investments_by_Microsoft_Corporation

Microsoft Assets are stellar long term. https://www.macrotrends.net/stocks/charts/MSFT/microsoft/total-assets.

Microsoft just reported good result. I am not sure at current level is worth a buy. However long term they will be around. They aren't Tesla in term of growth but certainly a step up to me before Tesla. 

Investment Strategy

Current USD is relatively weak. Which mean a good opportunity for currency conversion to invest new. However Tech Stock price is quite elevated and we could see correction upon entering the market.  

My strategy will be get some first, say 20% of the amount I planned for this counter. If the stock moves much further up and the climb is not spike, I can average up another 20% and so forth. If the stock goes down, I will wait for sufficient time before averaging down another 20%. In that way I started something and build up the position accordingly. So is a 5 stepping methodology and we can varies as we deem fit.

Make sense ?

Cory

2021-0129

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.