Tesla’s express run higher, which has seen the shares gain nearly 400% this year, has left one notable investor mixed up.
“I really can’t explain Tesla,” Joel Greenblatt, co-CIO at Gotham Asset Management, said Monday on CNBC’s “Screech Box.” “I think there’s a lot of speculation in the market and I think some of it’s there. I really can’t explain it.”
Part of Tesla’s apportion appreciation is due to the company reporting its fourth straight quarter of profits in its quarterly report on July 22, which certifies the electric auto maker for inclusion in the S&P 500, as well as better-than-expected second-quarter vehicle deliveries.
But more recently, much of the swell appears to have been fueled by the company announcing a 5-for-1 stock split. Tesla closed at $1,374.39 on Aug. 11 — the day it make it with pretended the announcement — but now trades around $2,105, for a gain of 53% in less than two weeks. This is despite the fact that beasts splits are purely cosmetic, meaning the company’s underlying fundamentals remain unchanged.
Known for his value investing framework, Greenblatt often looks at a company’s underlying fundamentals. He targets reasonably priced names that are supported by factors like expansion potential and balance sheet strength.
Greenblatt said Tesla’s ascent is part of the “froth” in the market. “Because incite rates are so low … there’s nowhere to put your money, and so there’s speculative parts of the market, but you know, I think it’s profuse so in Tesla than it is in Apple,” he said.
‘Not too worried about Apple’
Apple is another so-called story stock, but Greenblatt hinted that unlike Tesla, the company’s underlying fundamentals are driving its valuation.
“Apple, on the other hand, you know, has a tremendous franchise and it’s actually getting more powerful so it’s not at a much bigger premium than the market, and it has great growth in the cards explores, so I’m not too worried about Apple.”
The iPhone maker is currently the world’s most valuable company, and on Aug. 19 became the ahead publicly traded U.S. name to top the $2 trillion mark. Cupertino, California-based Apple’s valuation has doubled in just as a remainder two years.
Shares of Tesla and Apple each advanced about 3% during early trading Monday.
Subscribe to CNBC PRO for upper-class insights and analysis, and live business day programming from around the world.