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Why you shouldn't bet against Elon Musk
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Is it going to be hot in the city after all? Elon Musk sure hopes so.
The man behind Tesla is also a co-founder of SolarCity, run by his cousins, brothers Lyndon and Peter Rive. And, while Wall Street was disappointed by Tesla's recent quarter numbers, they were burning for SolarCity's.
(Read: SolarCity raises forecast as demand for solar installations rise)
Steve Cortes, found of Veracruz TJM, has a mixed view of SolarCity as an investment.
"I don't like solar stocks in general," said Cortes. "These businesses rely on government support and that kind of dependency, I don't think, is a long-term solid business outlook."
SolarCity's model has customers leasing panels installed by SolarCity. The company gets a tax credit to go along with the leasing revenues while the customer gets the energy from the panels.
But while Cortes has reservations with SolarCity's business model, he's a fan of the Tesla founder.
Musk "is a winner,” Cortes said. "Don't bet against winners. He's a visionary. So, when I balance those two considerations, for me, [SolarCity] is a hold."
(Watch: Tesla stock tumbles on outlook, price target cuts)
Ari Wald, head of technical analysis at Oppenheimer & Co., also is on the fence with SolarCity.
"I think it's for the traders," Wald said. "There's not a very strong signal I'm getting here."
However, he does see the stock trading in a downward-sloping trend channel that’s currently in a range between $46 and $57 a share. "Ideally, you'd like to buy at the lower end of that base," said Wald. "It looks like there's some demand at $46. On the other side, you want to buy the breakout. If SolarCity were to get above $57 resistance, I think a lot of traders would jump into this thing."
The man behind Tesla is also a co-founder of SolarCity, run by his cousins, brothers Lyndon and Peter Rive. And, while Wall Street was disappointed by Tesla's recent quarter numbers, they were burning for SolarCity's.
At one point Thursday, SolarCity
shares were up an astounding 20 percent. That's because while the
company reported worse-than-expected losses for the quarter, its
revenues beat estimates and SolarCity raised its 2014 forecasts.
But that doesn't mean SolarCity's stock is on a rocket to the sun.
Its shares are still 36 percent off their February all-time high of
$88.35.(Read: SolarCity raises forecast as demand for solar installations rise)
Steve Cortes, found of Veracruz TJM, has a mixed view of SolarCity as an investment.
"I don't like solar stocks in general," said Cortes. "These businesses rely on government support and that kind of dependency, I don't think, is a long-term solid business outlook."
SolarCity's model has customers leasing panels installed by SolarCity. The company gets a tax credit to go along with the leasing revenues while the customer gets the energy from the panels.
But while Cortes has reservations with SolarCity's business model, he's a fan of the Tesla founder.
Musk "is a winner,” Cortes said. "Don't bet against winners. He's a visionary. So, when I balance those two considerations, for me, [SolarCity] is a hold."
(Watch: Tesla stock tumbles on outlook, price target cuts)
Ari Wald, head of technical analysis at Oppenheimer & Co., also is on the fence with SolarCity.
"I think it's for the traders," Wald said. "There's not a very strong signal I'm getting here."
However, he does see the stock trading in a downward-sloping trend channel that’s currently in a range between $46 and $57 a share. "Ideally, you'd like to buy at the lower end of that base," said Wald. "It looks like there's some demand at $46. On the other side, you want to buy the breakout. If SolarCity were to get above $57 resistance, I think a lot of traders would jump into this thing."
In the end, though, Wald doesn't have a strong opinion because the stock went public just 1½ years ago.
"Not a lot of history in the long-term charts," Wald said. "I don't really have a long-term view here."
To see the full discussion on SolarCity, with Cortes on the fundamentals and Wald on the technicals, watch the above video. "Not a lot of history in the long-term charts," Wald said. "I don't really have a long-term view here."
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