TheStreet has chosen Tesla (NASDAQ: TSLA) as the best stock of 2020. The red-hot electric car manufacturer entered the top 10 most valuable companies in the world, and was added to the S&P 500 on Monday, December 21.
TheStreet polled a group of expert writers and editors at TheStreet, RealMoney, Action Alerts Plus, Stocks Under $10, and Trifecta Stocks and asked them to nominate candidates for the stock of the year. After sifting through the list to the top 25, each company was rated a certain number of points. After adding up the scores for each stock, a final rating was drawn up. The winner was clear: Tesla.
Tesla's shares have caught the attention of the world, surging 731% since the beginning of the year. 12 of the 16 voters chose Tesla as Share of the Year. The company entered the top 10 most valuable companies in the world, although at the beginning of the year it was not even included in the top 100. Tesla's market capitalization is higher than Volkswagen, Toyota, Daimler, BMW, GM, and Ford combined.
"Tesla is dunking on everyone."
Tesla's revenue has grown since 2013 at a staggering 52% compound annual growth rate. This means Tesla has grown in six years the same way Amazon has grown in ten.
"One thing Tesla made clear in 2020: it has no intention of slowing down."
In January, Tesla delivered the first Model 3 vehicles made at its China plant, exactly one year after construction began. According to the delivery reports, it seems likely that Giga Shanghai is set to produce around 150,000 vehicles in its first year of operation. This is tremendous growth, but it is not the only achievement.
In 2020, the company began construction of two new Gigafactories: in Berlin, Germany and Austin, US. According to the plan, both factories should begin their work in mid-2021.
While critics focused and fanned negativity towards Tesla, including the impact of COVID-19, the company proved that it can be profitable even when absolutely every car company in 2020 has failed. In July, following a seven-week production shutdown in Fremont due to the coronavirus, Tesla posted its fourth consecutive quarterly profit, while other automakers struggled with a lack of demand and cash. GAAP profitability was maintained, and Tesla posted a record 9.3% operating margin in the third quarter.
In November, S&P Global announced that Tesla would be added to the S&P 500 at the start of trading on December 21, despite the company being eligible for the first time in July. In the month from the S&P announcement to the close of trading on December 18, TSLA shares surged 70% to close at an all-time high of $695 per share.
In September, during Battery Day, Tesla announced that it was entering the battery industry, and would manufacture its own battery cells. The company aims to increase in-house annual battery production to 100 gigawatt-hours (GWh) per year by 2022, enough to produce 1.2 million 300+ mile range Model 3/Y vehicles.
In 2020, Tesla clearly showed its strength by generously rewarding its investors who believed in the company, and punishing those who did not believe. The nearly $40 billion in losses suffered by Tesla's short sellers in 2020 alone became the most significant in history and have no analogs.
© 2020, Eva Fox. All rights reserved.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.