ADVERTISEMENT
ADVERTISEMENT

Tesla shares have been booming — but another automaker has been doing even better (TSLA, RACE)

Ferrari has been expanding production and sales without undermining desire for its exotic cars.

Not all carmakers have seen their shares languish.

Tesla has unquestionably been on a tear since the beginning of 2017, up over 40%, with a market cap of $50 billion — neck-and-neck with General Motors and a few billion higher than Ford.

Over the past 12 months, Tesla shares have risen 50%. You might think performance like that would be hard to beat in the car business (even though a lot of people seem to think that Tesla is a tech stock).

But you'd be wrong.

The best-performing car company in the sector isn't Tesla, founded in 2003. It's Ferrari, founded in 1939.

ADVERTISEMENT

Okay, the Ferrari we're talking about has been a public company traded on the NYSE only since its 2015 IPO. But over the past 12 months, shares are up an astounding 92%.

Tesla is trading above $300 and Ferrari hasn't yet crossed $100, so Ferrari shares have been far cheaper, relatively speaking, with a far better absolute gain.

And here's the kicker. It's a safe bet that Tesla's stock price will be quite volatile going forward — just as it's always been volatile in the past.

Ferrari, meanwhile, has been expanding production and sales without undermining desire for its exotic cars. Building 7,000 cars annually could soon rise to 10,000. And it has the attention of a top Wall Street analyst. Morgan Stanley's Adam Jonas thinks the company is three years ahead of where the bank thought it would be at this time.

ADVERTISEMENT

"[W]e look for Ferrari’s high-quality earnings to double in approximately 5 years," he wrote in a research note published on Monday, going on to highlight Ferrari's low debt. "At a high level, we believe FCA can double its earnings power in 5 years. We don’t cover many companies that can do this, and it is particularly notable for a company so under-levered."

Here's another thing. Tesla is certainly a sexy company. But Ferrari is, well ... c'mon, it's Ferrari!

In all seriousness, Ferrari's rally looks to be based on solid fundamentals, while Tesla's is all about buying the future. The mind-bending thing is that buying Ferrari's future has cost relatively less — and returned more.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.
ADVERTISEMENT

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng

Recommended articles

Here's everything to know about being a virgin on your wedding night

Here's everything to know about being a virgin on your wedding night

7 do's and don’ts of the Holy month of Ramadan

7 do's and don’ts of the Holy month of Ramadan

Top 5 sweetest celebrity mother-child relationships that stand out for us

Top 5 sweetest celebrity mother-child relationships that stand out for us

International Women's Day: 5 Nigerian female celebrities championing women’s rights

International Women's Day: 5 Nigerian female celebrities championing women’s rights

Top 5 female directors in Nollywood

Top 5 female directors in Nollywood

6 things that will break a Muslim's fast during Ramadan

6 things that will break a Muslim's fast during Ramadan

5 benefits of fasting during Ramadan

5 benefits of fasting during Ramadan

5 reasons Easter was more fun when we were children

5 reasons Easter was more fun when we were children

Dos and don’ts of supporting Muslims during Ramadan

Dos and don’ts of supporting Muslims during Ramadan

ADVERTISEMENT
ADVERTISEMENT