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Investor's Corner

Tesla’s (TSLA) surge in 2020 pushes bull Baillie Gifford up 72%

Tesla CEO Elon Musk unveils futuristic Cybertruck in Los Angeles, Nov. 21, 2019 (Photo: Teslarati)

Tesla (NASDAQ: TSLA) has experienced a 400% growth in 2020 so far. The company’s surge in stock price has made many long-time investors extremely wealthy in the matter of a few months. However, large investment firms and hedge funds, like Baillie Gifford, who hold sizeable TSLA stock portions, are seeing significant growth in their portfolios.

A report from¬†Bloomberg Wealth said that the 112-year-old firm in Scotland has reaped the benefits of being a “TSLA long.” A massive TSLA holding has increased a global equity fund run by Baillie Gifford analysts Mark Urquhart and Tom Slater by 72% this year. This hot run has made it the top performer among U.K.-based firms in 2020.

The largest holdings in the next two funds in Morningstar Inc.’s ranking are Tesla, which are also run by Gifford. With a surge in manual investing from small, individual shareholders through apps like Robinhood, Urquhart and others at Gifford are using their firm’s success to show that having fund managers who can identify winning stocks before they are sought out by everyone with a few dollars to put into the market.

Baillie Gifford fits that description perfectly. The company first bought TSLA stock in early 2013. Its price at the time was less than $10 a share. Currently, the stock trades above $435, but this value comes after the 5:1 stock split that Tesla performed on August 31st.

Now, Urquhart’s firm is looking for the next stock that will explode in value over the next few years. With the ongoing pandemic, Gifford analysts are looking at stocks that are promoting the change in social behavior. One is Zoom Video Communications, which has surged in value as social distancing measures have become more popular. Another is Beyond Meat Inc., which manufactures alternatives to animal products, which could decrease the industrial farming sector that contributes to some climate issues.

As for Tesla, there is no secret to who Baillie Gifford analysts are giving credit to in terms of the company’s rise in price: Elon Musk.

He “has almost single-handedly transformed an industry,” Urquhart said in an interview. “He’s got flaws like we all have, but they’re more in the public eye. You have to make it clear to your investors that there will be volatility, but we are invested for the long run.”

At the time of writing, TSLA shares were trading at $33.92, up 2.03%.

Disclaimer: Joey Klender is a TSLA Shareholder.

Tesla’s (TSLA) surge in 2020 pushes bull Baillie Gifford up 72%
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