Tesla Institutional Investors: Who All Sold Too Early?

In 2019 so far, Tesla (TSLA) rose 29.3%. Meanwhile, the S&P 500 Index gained 29.2%. The top institutional investors were likely bullish on the electric car manufacturer in Q3 2019. Only two out of the top 10 largest institutional investors of TSLA reduced their holdings in the third quarter.

Tesla’s rally

On December 23, Tesla CEO Elon Musk tweeted, “Whoa … the stock is so high lol” after share prices surpassed the $420 level for the first time. On Friday, TSLA closed at $425.35. So, the rise in share prices started in Q4 2019.

On October 24, TSLA spiked 17.8%. A day before, it reported an adjusted EPS (earnings per share) of $1.86 for Q3 2019. Meanwhile, analysts’ mean estimate suggested an EPS of minus $0.42. Also, the launch of Cybertruck could be another bullish factor for stock prices.

On Friday, TSLA closed 30.7% above analysts’ mean target price. Since September, analysts’ mean target price on TSLA has risen. Around 35.5% of analysts tracking TSLA recommended a “buy” or a “strong-buy.” Also, about 42% of the analysts have a “sell” or a “strong sell” call on the stock. The remaining analysts surveyed by the Reuters recommended a “hold” on the stock.

Tesla’s top buyers

In Q3 2019, Sumitomo Mitsui Trust Holdings bought about 733,800 TSLA shares. Thus far, it was the largest buy by any institutional investor.

In the third quarter, Tesla was the second-largest buy of Sumitomo Mitsui Trust. Also, it has been holding TSLA since Q3 2013. However, L3Harris Technologies (LHX) was Sumitomo Mitsui’s top buy in Q3 2019. Sumitomo Mitsui’s other top buys are Alphabet (GOOGL) and Fidelity National (FIS).

Renaissance Technologies bought around 568,300 TSLA shares in the third quarter. Jim Simons manages Renaissance Technologies and is well-known for his quantitative strategy. To know more, read Renaissance Technologies: Analyzing Its Q3 13F.

Capital Research and Management added about 450,700 TSLA shares in Q3 2019. So, it was the largest buyer among top-ten largest institutional investors.

Put options

In the third quarter, the Royal Bank of Canada raised TSLA’s put options by 2.8 million. Also, Allianz Asset Management and Wells Fargo & Company raised TSLA’s put options by 2.3 million and 2.2 million, respectively. Any further rise in TSLA might be a concern for TSLA’s put option holders

Top sellers for Tesla

In the third quarter, among the top 10 institutional holders, Jennison Associates, and BAMCO, Inc. reduced their stake in TSLA. Goldman Sachs Group Inc sold 1.1 million Tesla shares, the largest stake sell by any institutional investor. 

Goldman Sachs Group’s top sell includes Uber Technologies (UBER) and Anadarko Petroleum (APC) in the third quarter. In 2019, UBER fell 28.2% on profitability concerns. Also, Occidental Petroleum (OXY) bought Anadarko Petroleum.

Morgan Stanley sold about 837,100 TSLA shares in Q3 2019, the second-largest sell by any institutional investor. Plus, Citadel Advisors was the third-largest institutional seller of TSLA shares.

In Q3 2019, TSLA was among Citadel’s top-five sells. Citadel top sells include the S&P 500 call and put options, Invesco QQQ Trust (QQQ) put options, and Red Hat. To know more, read What Were the Top Holdings of Citadel Advisors in Q3?