I know a lot of my readers follow Paul Mampilly pretty ardently, partly because of the fact that his publisher, Banyan Hill, is one of the more aggressive promoters in newsletterdom these days, and partly because he made some very strong picks with his first, heavily promoted service — particularly the teased pick of STMicroelectronics (STM), which his publisher has been pushing pretty heavily, off and on, for more than a year and a half (first covered here, back before his publisher changed names to Banyan Hill).

So today we’ve got a quick bonus solution for you, before I get back to working on my Annual Review for the Irregulars… though really, I should call this one a “guess,” not a solution, because he doesn’t drop enough clues to give us any real certainty. What’s he recommending now?

He’s pitching “New Energy” as a “Mega Trend” for his Profits Unlimited subscribers — meaning renewable, portable, storable energy. And this is what he says about his stock:

“This month, I told my readers in Profits Unlimited to buy into the company that’s leading the new-energy revolution … and that it’s going to be bigger than Amazon and Google combined.

“You see, this company has products that touch every aspect of new energy, from getting its energy from natural sources, to storing it so it can be generated locally and finally, to making it portable so that it can be used for travel.

“With those aspects combined, this company is set to disrupt three massive industries.”

The basic argument is that this company is “disruptifying” those three large energy markets, like Google and Amazon and Netflix disrupted their established markets (advertising, retailing and television) in building dominant businesses that sucked the life out of the older players in the industry (my words, not Mampilly’s).

And he concludes:

“Right now, the energy, utilities and transportation industries are about to go through what Netflix, Amazon and Google did a few years ago to their various industries.

“The old is about to get wiped out, and the new is about to take its place.

“This is an extraordinary opportunity to make massive gains if you are willing to buy into the new companies, like the one I just recommended to my Profits Unlimited readers.”

So what’s he actually recommending? My guess — and it is a guess, this time — is Tesla (TSLA). I can conjure up no other company that has meaningful business in both generating renewable electricity (through Solar City), storing electricity (batteries, including the PowerWall as well as the utility-scale projects they’ve attempted — notably in Australia), and disrupting transportation (through high mind-share and evangelism in electric vehicles).

You’ve probably heard of that stock, no?

So what do you think? Tesla is the very definition of a “battleground” stock, there is no way to estimate what you think the company is worth unless you look a few years into the future and believe that Elon Musk will succeed in creating a much higher-volume electric car manufacturing company and cross-sell those Tesla owners on Powerwall home batteries and Solar City rooftop solar installations.

To my mind, there is no reasonable way to use real or near-term numbers to justify the price of Tesla shares, though analysts keep trying, you have to use forecasting and belief — which doesn’t mean Tesla can’t succeed, it just means that you have to see the future to believe it will succeed, you can’t base your assessment on the rate of growth or the current or anticipated cash flow. To a large degree, Tesla shares are a bet on Elon Musk’s vision of the future and his ability to muscle the rest of us into his vision, and that has worked extraordinarily well for many years.

The numbers that you might use, were you to be so inclined, would probably be the 2019 numbers, the first year that analysts foresee Tesla making a profit. The analyst estimate is for earnings of $4.40 per share in 2019, on $26 billion in revenue (though the range of estimates is huge for both). At that rate, Tesla would be trading at about 2X 2019 sales and 77X 2019 earnings.

The only company with a somewhat similar business that’s in any way comparable on those metrics, at least that I can think of after some brainstorming, is Ferrari (RACE) on price/sales (much higher, about 5X), but that’s because its supercars are an incredibly high-margin luxury business (about 50% gross margin… Tesla’s gross margins in the low teens are squarely between Ford’s and GM’s, both of which trade at about 0.3X sales). Solar installers and product developers don’t trade at anywhere near those valuations, with the possible exception of favored US manufacturer First Solar (FSLR), which is really the sole beneficiary of the recently discussed solar panel import tariffs — solar installation is a growth industry still, but most installers are not particularly high margin companies and the few that are public trade at pretty cheap valuations.

But still, those are numbers that you can work with as you build your assumptions… although we should remember that analysts have been irrationally optimistic about Tesla’s earnings for several years (three years ago, the anticipation was that 2017 would bring $7 per share in earnings — in actuality, Tesla is likely to end the year losing close to $9 a share, thanks in some part to the much slower-than-expected rollout of their “Model 3” lower-priced electric car). Analysts have also priced in an estimate that Tesla will grow earnings at 35% a year, on average, over the next five years… so perhaps you can make that work in your brain if you use the imagined 35% growth number and the guesstimated 2019 earnings number to say that the 2019 PEG ratio could be not much above 2. Which ain’t so bad.

But really, you’ll probably find yourself stuck if you justify an investment in Tesla based on their current or forecasted financials, because it’s not a stock that is driven by analysts — it’s driven by Elon Musk and the power of transformation and imagination as he upends the fossil fuel industry and the car industry and changes the American landscape for the better. You either believe in that and say “Elon will make it happen,” or you look at the numbers and say, “this is the most ridiculously valued industrial company I’ve ever seen.”

Neither is wrong until the share price says its wrong. People have been ardently betting against Tesla because of its wild valuation for five years now, to their detriment, so for now the short side is wrong. This year, I don’t know which way that will turn — presumably a lot will rest on the ability of Tesla (or lack thereof) to really mass-manufacture those Model 3 cars that have been pre-ordered, I expect that if the current logjam loosens, as Tesla says it will, and they begin to deliver those new cars as promised, the stock will probably react well to that… if there are further delays, the stock will probably disappoint. Throw in the new tariffs on Chinese solar panels and whatever you think the future government incentives will be on electric cars or solar power, and you can make your own guesses.

But really, it’s about belief in Musk’s future — buy that and you’ll want to own the stock, doubt it and you’ll find no rational reason to own Tesla at this price. You can make your own call on that, all I can do is guess for you that Mampilly is recommending Tesla to Profits Unlimited subscribers (and, indeed, it has been recommended over and over by growth-stock services over the years). If you’ve got a call on Tesla, let us know with a comment below.

Disclosure: I own shares of both Alphabet (Google) and Amazon, but not any other stock mentioned above. I will not trade in any covered stock for at least three days, per Stock Gumshoe’s trading rules.