Tesla (TSLA) investors have had an incredible ten-year ride that has outperformed every other S&P 500 company. It has the potential to make you a billionaire.
The consumer discretionary stock debuted on June 29, 2010, and it has since soared 21,323 percent to a new high of 1,023.59 on Monday. According to an Investor's Business Daily review of data from S&P Global Market Intelligence and MarketSmith, Tesla outperformed every single large stock now in the S&P 500, as well as all those on the midsized S&P 400 and S&P 600 small caps, on a percentage basis.
If you had put $10,000 into Tesla founder Elon Musk ten years ago, your investment would now be worth $1.8 million. This equates to an annual return of more than 68 percent on average. During that time, $10,000 invested in the S&P 500 increased 272 percent to $37,115. That's only a 14 percent annual compounding rate.
Who better to put your money on than Musk? There aren't many people. None can match Tesla's wealth-creation prowess.
Tesla's meteoric rise is nearly impossible to comprehend.
Tesla's market worth has increased by $1 trillion in the last ten years, to $1.01 trillion. It's already the S&P 500's sixth most valued firm, ahead of Facebook (FB).
Tesla is currently worth about five times more than Toyota Motor (TM), making it the world's most valuable automaker.
What about Ford (F) and General Motors (GM)? It's almost as though they're rounding errors. Tesla is valued about seven times the combined value of General Motors and Ford.
For growth investors who know what to look for, this isn't a mystery.
GM's stock has risen 131 percent in the ten years since it was relisted in November 2010 following bailouts during the 2008-2009 financial crisis. What about Ford? Tesla's stock has only risen 61 percent in the ten years since it went public.
Tesla's stock is clearly in overdrive, as evidenced by its 98 IBD Composite Rating.
Tesla is now proving to be a money-making machine. Since its inception in 2003, Tesla has lost money on a net income basis every year until last year.
Analysts believe that 2018 is the year Tesla breaks even and then some. On an adjusted basis, the company is predicted to earn $6.12 per share in 2021, up more than 170 percent from 2020. Even if all expenses are included, analysts estimate that Tesla will earn $4.32 per share, or $4.9 billion.
And investors would be wise to hope Tesla achieves these goals. Tesla's stock has risen more than 140 percent in the last year, to 1,023.59 per share. That's already more than analysts predict the stock will be worth in a year.
With such high expectations, there isn't much room for error.
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