Tesla, Inc. (TSLA) managed to maintain strong momentum for the first five months of 2020 and has steadily outperformed the S&P 500. Despite the Coronavirus pandemic causing disruptions on its production line, Tesla has fared well, seeing just a slight dip in March. Tesla continues to be a leader in environmentally friendly vehicles.

Strong Results

Overall, hedge funds were actively buying the stock in the first quarter, helping the electric vehicle and clean energy company to land on the WhaleWisdom Heat Map with a ranking of 27. Tesla rose by approximately 123.5% in comparison to the S&P 500’s loss of about 5.9% since the beginning of the year.

(WhaleWisdom)

Hedge Funds Are Active

Hedge funds were actively buying the stock in the first quarter, and aggregate 13F shares held by hedge funds increased to 28.6 million from 28.1 million, an increase of almost 2%. Of the hedge funds, 58 created new positions, 55 added to an existing holding, 32 exited, and 65 reduced their stake.

Institutions were not quite as faithful to the company, as overall, institutions decreased their aggregate holdings by nearly 4.1% to 93.6 million from 97.5 million.

(WhaleWisdom)

Mixed Estimates Despite Rising Demand in China

Analysts are bullish on Tesla and forecast strong growth in 2020, with revenue expected to increase by roughly 40%. The company’s 2020 earnings per share estimates are also strong, and are expected to rise to $3.78 per share from $0.20 per share in 2019. Analysts have a favorable outlook for the company, raising price targets. Rising demand in China for electric-powered performance vehicles has contributed to these positive outlooks. Wedbush Securities, Inc. raised their price target on Tesla to $1,000. Wedbush cited accelerating demand in China for the Model 3. Analysts are also looking ahead to a potentially game changing electric car battery developments from Tesla at Battery Day in June of 2020.

Goldman Sachs Group, Inc. lifted its outlook for 2020 automobile sales to -14.5% from -17.5%, with an additional expectation that global automobile sales will rise by 8.5% in 2021. However, Morgan Stanley downgraded Tesla, slashing its price target to $650 from $680 and moving the stock to an Underweight rating. Morgan Stanley points out the long-term risks in a post-Coronavirus world, including fewer powerful players in transportation and ongoing tensions between the United States and China.

Cautious Optimism

While 2020 has started off well for Tesla, it is understandable why analysts have had mixed forecast for the long-term. The continuing tensions between the United States and China and the negative economic impact of the Coronavirus cannot be ignored, however, neither can technological advances coming from Tesla. Tesla’s electric cars are anticipated to soon come close in price with internal combustion engine vehicles, a potential game changer for the automobile industry. With its potential for growth, it may be why hedge funds have been moving into the shares despite the broader stock market turmoil.

DexCom Inc. (DXCM) had a reasonably strong start in 2020, outperforming the S&P 500 over the past five months, rising by approximately 66.6% in comparison to the S&P 500’s loss of about 1.14%. The strong start and investor demand have gotten the shares added to the WhaleWisdom WhaleIndex.

DexCom is a medical device company focused on the development, manufacturing, and distribution of glucose monitoring systems for diabetes management. The company has received positive attention from diabetes patients due to DexCom’s G6 continuous glucose monitoring (CGM) system.

Making the Index

Given DexCom’s impressive performance, it is not surprising that the stock was added to the WhaleWisdom WhaleIndex 100. DexCom has a presence in the healthcare sector, and its latest CGM has appeal for being able to pare to smart devices to send customers alerts and minimize the need for fingersticks. With a healthcare product of this nature, it’s understandable that even the uncertainty of our current stock market has had little impact on DexCom’s value.

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Institutions Sell, While Hedge Funds Acquire

Institutions overall were selling the stock, but volume was minimal. The number of aggregate 13F shares decreased by approximately 0.9% as of Q1 2020, to roughly 89.4 million from about 90.2 million just three months earlier. For comparison, hedge funds increased their total 13F shares by about 1.7%, up to 35.5 million from 34.9 million.

(WhaleWisdom)

Analysts Share Favorable Forecasts

Citigroup Global Markets, Inc.’s, increased DexCom’s price target to $440 from $361 and maintains a Buy rating on shares, recognizing that the demand for new technology in diabetes management is high. Piper Sandler raised their price target to $450 from $375, while keeping an Overweight rating on the shares.

DexCom has seen its earnings rise in recent years, and now analysts are forecasting a significant increase in year-over-year growth for 2020, rising 51.9% to $2.17 per share. Meanwhile, revenue is forecast to grow by over 22% in 2020 to $1.79 billion.

Promise Lies Ahead

While DexCom isn’t cheap, trading for 121 times 2021 earnings estimates, there continues to be strong demand for the shares. DexCom’s climb onto the WhaleWhisdom Index supports this demand and gives hope for a sustained move higher. However, it should be noted that the restrictions on non-essential healthcare services during the Coronavirus pandemic have had a slightly negative impact on the volume of new customers for DexCom, but this is viewed as temporary. DexCom appears to have positioned itself to continue forward momentum through and beyond the pandemic. Current investors will likely maintain their stakes in DexCom, with new investors to come.

Amazon.com Inc.’s (AMZN) stock has had a reasonably strong start to 2020. While the shares have had a few minor dips along the way, Amazon has steadily outperformed the S&P 500, rising by approximately 30.9% in comparison to the S&P 500’s loss of 5.8%.

Hedge funds were actively buying the stock in the first quarter, even ahead of recent months’ impressive strides on the WhaleWisdom Heatmap. At a time when many companies are struggling amidst the coronavirus pandemic and its impact on the economy, Amazon has benefitted from customers’ heightened needs and even panic buying of essentials such as toilet paper, hand sanitizer and food. While Amazon has seen disruption to its supply chain, often causing delays in getting products out, customer demand has not waivered.

Institutions and Hedge Funds Are Active

Amazon saw its position on the WhaleWisdom Heatmap in the first quarter of 2020, move up to 5 from 22. The rate of institutions buying the stock was almost twice that of those selling. During the quarter, the aggregate 13F shares held by institutions increased to approximately 355.9 million from 280.1 million, an increase of about 27.1%. The total 13F shares held by hedge funds increased to about 100.2 million from 91.7 million, an increase of almost 9.3%.

(WhaleWisdom)

Favorable Estimates

Analysts forecast strong growth in 2020 and estimate that earnings will fall by 18% to $18.85 per share, despite revenue rising by 23% to $345 billion. However, earnings are forecast to accelerate in 2021, by more than double to $37.48 per share, driven by strong revenue growth, which is estimated to increase by 18% to $406.6 billion.

Analysts have a favorable outlook for Amazon, raising price targets across the board. JPMorgan Chase & Co.’s raised Amazon’s price target to $3,000 from $2,525, while keeping an Overweight rating on the shares. Deutsche Bank raised its price target to $2,750 from $2,300, while maintaining a Buy rating. Finally, Susquehanna raised Amazon’s price target to $3,000 from $2,500, keeping a Buy rating on the shares.

Bright Outlook

With the current health pandemic and governmental restrictions closely intertwined to most Americans’ lives, there continues to be a rising trend in purchases from this e-commerce company. As top analysts have suggested, investors have reason to keep their faith in Amazon’s growth potential and continue to enjoy the ride.

JD.com, Inc. (JD) has seen a reasonably upward trend in performance over the past six months, seemingly riding out the storm that the global coronavirus pandemic has brought upon the stock market. The China-based online direct sales company reported better than expected results on May 23, 2020, and now leads the S&P 500 with a staggering gain of approximately 41.6% versus a decline of 8.5%. 

Strong Results Despite Global Tensions

JD had an impressive rise in the WhaleWisdom Heatmap in the first quarter, with a ranking at one. Despite JD’s forward movement and growth in this challenging stock market, JD’s ties to China leave it partially influenced by the recent rising U.S.-China tensions related to the pandemic. While arguments over blame for the coronavirus have not had a significant impact on Wall Street, the debate and tension have nevertheless hung over the market and remains a concern for some investors.

Still, JD’s strong ranking and position on the WhaleWisdom Heatmap may be a reason for hope for the stock’s future.

(WhaleWisdom)

Institutions Are Buying

Institutions overall were buying the stock, with the number of aggregate 13F shares increasing by approximately 12.4% as of March 31, 2020, to roughly 284.2 million from about 253 million just three months earlier. For comparison, hedge funds increased their total 13F shares by about 2.9%, up to 613.7 million from 596.3 million.

(WhaleWisdom)

Analysts’ Forecast Are Favorable

AllianceBernstein Holding LP increased JD’s price target to $60 from $55. However, Bernstein is not the only one with faith that the stock will go higher, as many Wall Street analysts are bullish on the stock. Overall, 30 analysts cover the stock with an average price target of $58.08, or 16.4% higher than the equity’s price on May 22.

Currently, analysts estimate second-quarter earnings per share of about $0.35, an increase of 8% versus a year ago. Meanwhile, analysts forecast revenue of about $26.6 billion, an increase in year over year growth of approximately 24.8%. JD has seen active customer accounts rise, with a significant increase in daily monthly mobile users in March, up about 46% year-over-year.

Sustained Growth

JD has been fortunate to see benefits from coronavirus-related demand for online shopping. While JD is not cheap on a PE basis, and political tensions between the US and China remain, there is potential for sustained growth for the company. JD’s stock may still garner the attention of investors due to the longer-term potential for payoff.

Nvidia Corp. (NVDA) has faced a rocky path during its upward climb, and while March was an especially challenging month for its stock, fortunately, performance improved as of mid-May. The stock has risen approximately 44.3% in comparison to the S&P 500’s loss of about 12% so far this year.

After over a year in the making, Nvidia recently finalized its $6.9 billion acquisition of Mellanox Technologies, Ltd., after receiving approval from China’s antitrust authority. While China’s approval comes with certain conditions, they appear reasonable and should not hinder the success of the deal. The acquisition should bring great potential for growth. So it is understandable that the purchase would have a favorable impact on the chipmaker, even in a time of economic stress for the overall market from the Coronavirus pandemic.

Nvidia is expected to report results on May 21, with investors anxiously awaiting the earnings forecast.

Institutions Are Buying

Institutions overall are buying the stock, though with a conservative stance as the number of aggregate 13F shares increased by approximately 0.5% as of December 31, 2019, to roughly 399.8 million from 397.9 million three months earlier. For comparison, hedge funds increased their total 13F shares by about 1.4%, up to 151.1 million from approximately 149 million.

Nvidia’s WhaleWhisdom Heatmap rating shot up to an impressive 42 on December 31, up from a previous ranking of 89 three months earlier. Also, as of May 15, Nvidia’s stock was trading at a record high.

(WhaleWisdom)

Estimates Reflect A Positive Outlook

Growth estimates for Nvidia are strong. Analysts estimate fiscal first quarter 2021 earnings per share of about $1.68 with an impressive increase and year over year growth of approximately 90.8%. Meanwhile, revenue is forecast to have increased by 34.8%to $2.99 billion. Jefferies Group, LLC., recently highlighted Nvidia as a core holding. In addition to favorable words from Jefferies, Needham & Co., recently raised Nvidia’s price target to $360, predicting further upside.

Strong Performance in an Uncertain Market

Nvidia’s strong 2020 performance to-date has come at a time when the S&P 500 has suffered considerable drops related to the global Coronavirus pandemic. While Nvidia, like other technology stocks, hasn’t been untouched by Coronavirus related sell-offs, they’ve benefited from the application of their GPU technology during this time, as well as the acquisition of Mellanox. It likely bodes well for the stock and a strong reason why the shares are held favorably by some of the top institutions and hedge funds.