Tesla, the high profile electric car maker with ambitions in the coming autonomous vehicles market is one of the most controversial big ‘tech’ stocks on the market. A valuation based on multiples of revenues and occasional profits that dwarves that of traditional car makers with established business models and a controversial CEO in Elon Musk prone to outlandish behaviour and missing targets.
Tesla divides investor opinion. The company’s stock is a favourite of ‘shorters’ taking bets its share price, giddy on optimism around uncertain future profits, will eventually face reality and plummet. But Tesla has even more disciples happy to put their faith and money in those uncertain future profits. They see the company as better placed than traditional automakers to become a dominant force in the future market for electric-only and driverless cars.
British investors, new data published by Interactive Investor, one of the UK’s biggest platforms for investing online, seem to be largely in the latter camp. The company says that across Wall Street-listed stocks, only Apple and Amazon have proven more popular than Tesla among its 300,000+ online stock broking account holders. Hargreaves Lansdown, the UK’s biggest online investment platform backs that up, saying that Tesla the most popular overseas stock with British investors last month.
UK investors are still a lot more likely to invest in London-listed companies than those from anywhere else in the world. This kind of ‘domestic bias’ is also common in other countries with large, developed stock markets. However, over the last decade it has become far easier and cheaper for Brits to buy stocks listed on other major exchanges around the world. Gradually more are doing so and adding international exposure to an investment portfolio can help diversify risk, something which has been proven to lead to better longer term returns.
Over the whole year, Amazon was the most popular overseas stock with Interactive Investors account holders, followed by Apple, then Tesla, Facebook and Netflix. Perhaps surprisingly there is no room in the top five for Google-owner Alphabet.
The most popular London-listed stock was Lloyds Banking Group, followed by Vodafone. In third place, and the most popular stock outside of the FTSE 100 index of the UK’s 100 largest public companies, was Sirius Minerals. The company is developing a mine for fertiliser minerals on the North Yorkshire moors. More investors bought its shares than those in BP and UK Oil and Gas, which were respectively the fourth and fifth most popular UK stocks.
The figures suggest that British investors tend to make more conservative choices with domestically-based companies but favour racier technology ‘growth’ stocks when dipping their toes into overseas markets.