Gary Black requests that they repurchase Tesla stock ( NASDAQ:TSLA ) . Any stock can gain from share repurchases. After all, a corporation is just another share buyer, and stock values climb when there are more buyers than sellers.
Gary Black, a co-founder of FFND, wrote to Tesla’s board of directors with suggestions for how to use part of the company’s expanding cash reserves.
Part of Black’s letter said that “Tesla stock is currently priced at its lowest [price to earnings] ratio since Covid.” Now that the company has an investment-grade credit rating, we think it would be wise to seriously contemplate an aggressive $10 billion stock repurchase over a number of years.
Tesla’s debt has recently received an investment-grade BBB rating from S&P Global Ratings. Furthermore, having an investment-grade credit rating gives Tesla ( NASDAQ:TSLA ) additional access to cheaper financing.
Tesla Stock Valuation
After a difficult period for Tesla shares, Black wrote to Tesla. In the ten trading days before to the letter, shares fell by over 25%, bringing the stock’s valuation to less than 37 times projected 2023 profits.
That price is roughly as low as Tesla shares has recently traded. In March 2020, when Covid-related lockdowns virtually shut down the U.S. economy, shares were trading at about 30 times profits.
One use of any company’s free cash flow is buybacks. Theoretically, they function best when the company’s own shares have the lar...
Click here to read the full article on PressReach.com .Subscribe to the PressReach RSS feeds:
- Featured News RSS feed
- Investing News RSS feed
- Daily Press Releases RSS feed
- Trading Tips RSS feed
- Investing Videos RSS feed
Follow PressReach on Twitter
Follow PressReach on TikTok
Follow PressReach on Instagram
Subscribe to us on Youtube