Stocks to sell

If you’re a Tesla (NASDAQ:TSLA) shareholder and looking for some good news to reverse the slide of TSLA stock, you won’t find it in the delivery numbers for its biggest Chinese electric vehicle (EV) rivals. 

For example, Nio (NYSE:NIO) delivered 5,074 vehicles in April, down from 7,100 a year ago and approximately 10,000 in March. To reach the analyst goal of 31,000 EV deliveries in the second quarter, it will have to deliver almost 26,000 over the next two months. 

Tesla has much greater geographic diversification than its Chinese peers, which means any issues at its Shanghai plant shouldn’t hurt its delivery numbers by nearly as much. That said, it makes sense for prospective Tesla buyers to tread carefully at this point. 

TSLA stock is down nearly 20% in the past month. This downward spiral has to do with supply chain and Covid-19 issues, while investors are also discounting its shares due to Elon Musk’s buy of Twitter (NYSE:TWTR) for $44 billion. 

Estimates suggest the Shanghai shutdown cost Tesla 15,000 fewer deliveries in the first quarter. As a result, it came in with 310,000 deliveries worldwide in first-quarter 2022, 1,000 more than Q4 2021 but 68% higher than Q1 2021. Tesla estimates that its second-quarter deliveries ought to be flat, give or take, to its Q1 2022 numbers. 

However, Musk believes that its third and fourth quarter delivery numbers out of its Shanghai factory will increase dramatically as it gets back to 100%. 

If you don’t own TSLA stock but are thinking of buying some, It won’t hurt to have a wait-and-see attitude toward its share price. The markets aren’t exactly brimming with confidence, with the S&P 500 and Nasdaq 100 down more than 10% and 13.5%, respectively, in the past month. 

As MarketWatch pointed out Monday, TSLA stock lost 19.2% in April, its worst monthly performance in more than two years. There isn’t much in the way of news to surface that would act as a catalyst until it announces May deliveries in early June. 

In the meantime, it could test $800, where it traded in mid-March and October 2021 before that. 

No, the Chinese numbers do NOT scream Tesla’s a buy at the moment. That should change in the coming weeks. Until then, patience is required. 

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.

Articles You May Like

Cathie Wood says her ‘volatile’ ARK Innovation fund shouldn’t be a ‘huge slice of any portfolio’
Market Watch: How Trump’s Tariff Strategy Could Reshape This Rally
Three Mile Island restart could mark a turning point for nuclear energy as Big Tech influence on power industry grows
Dental supply stock surges on RFK’s anti-fluoride stance, activist involvement
Hedge funds performed better under Democratic presidents than Republican ones, history shows