The uncertainty in markets right now has hit growth stocks, particularly in the tech space, hard. Many names are down as much as 50 percent off their highs, and at the market low a few weeks back, that included nearly half the stocks in the Nasdaq.
Markets are starting to come up, although they’re still willing to sell off on uncertainty. However, one top growth name has managed to navigate supply chain and other global issues to remain strong.
That company is Tesla Motors (TSLA). Shares rose last week as the company announced plans to split its shares again. The stock remains up about 64 percent over the past year, although it’s still about 15 percent off of its all -time highs.
The company is best known for its electric vehicles, but a broader look at the company’s solar and other power operations show that it could be a far larger player in an overall trend of green power generation and use.
Action to take: Investors may not necessarily like shares here, given their high price. But with a split likely in the coming months, and with shares at their best valuation in nearly two years at 111 times forward earnings (down from 175), it may be worth picking up a few shares here.
For traders, the stock split could fuel a short-term rally. The August $1,600 calls, last going for about $40, or $4,000 per contract, are an inexpensive way to bet on the rise of 100 current shares following a split in the coming months. Traders should look for a post-split rally to take profits before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.