What’s Cabot’s “Small Cap Medical Juggernaut?”
by Travis Johnson, Stock Gumshoe | June 10, 2016 6:20 pm
Solving a teaser pitch for the Friday File, plus a checkin on some REITs
This is premium content. To view this article (and to have full access to the rest of our articles), sign up. Already a member? Log in.
Source URL: https://www.stockgumshoe.com/reviews/small-cap-confidential/whats-cabots-small-cap-medical-juggernaut/
Speaking of Tesla a friend sent me these comments from a newsletter writer:
Musk distracts investors by portraying Tesla as a technology company, not a car company. Don’t be fooled. Tesla is a car company. The auto industry is known for its slim operating and profit margins, even for luxury-car makers. BMW’s gross margins are only around 20% and its profit margins around 5%. Tesla’s gross margin is around 23%, and it isn’t even close to earning a profit.
The company has been losing money since its inception… $2.3 billion since 2007. Its free cash flows – cash profits after paying for capital expenditures – are even worse – negative $4.4 billion. Analysts expect Tesla to burn through another $1.4 billion of free cash this year.
Tesla tries to hide its horrible business by using nonstandard – or “non-GAAP” – accounting to draw investors’ attention away from its true financial condition. We wrote about this extensively in the last two issues when we recommended shorting Tesla.