Growing Business and Side Profits Bode Well for This Big-Name Tech Play

There’s always a lot to read on a company’s earnings report. Tesla Motors (TSLA) fared well with a strong earnings and sales beat. And the company disclosed that it sold some of its Bitcoin position at a profit, making over $110 million there—or more than it’s made from selling cars in its existence.

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  • Yet even with strong earnings numbers and a solid return on cryptocurrency trading, shares sagged a bit.

    Looking out over the longer term, shares appear to be setting up for a bigger move ahead. The company earned 93 cents per share, against estimates in the $0.75-0.80 range. And sales topped $10.4 billion. Revenue rose by 74 percent.

    While production is going fine, some automotive parts shortages may impact the upcoming quarters, and the company reported that it weathered the chip shortage so far.

    Action to take: Shares are well off their speculative highs from earlier in the year. It appears that shares are consolidating for a move higher. That may play out in a few weeks, or it may take longer, given concerns over parts shortages. Investors could look to start accumulating shares here.

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  • For traders, a possible sideways pattern could lead to income generation from a trade like a put sale. The July $600 put, currently going for about $30, could be sold, adding $3,000 in cash to a trader’s account. As long as shares remain over $600 at expiration, that could be used to create some modest cash. If shares are under $600, traders would be in at $570 per share, a steep discount to the current price in the low $700 range.

     

    Disclosure: The author of this article has no positions in the stock mentioned here, but may make a trade on this company after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.