Tesla and Meta Become a Value Investor's Delight in 2023

Despite all the market turmoil we are seeing in the wake of hiccups (to put it mildly) in the bank sector, two big names continue their quest for the “comeback player of the year” award.

While Tesla (TSLA) (up 70% year to date) has given back some of its recent gains after hitting $214 last month, the electric vehicle maker seems to be falling out of the news cycle a bit. Once Elon Musk bought Twitter there didn’t seem to be a day that Tesla was not battered somewhere in the financial press.  I think that has slowed down and now it’s up to the company to prove that it’s cheap at 33x and 27x 2024 and 2025 estimated earnings, respectively. 

Tesla shares are still more than 55% below their all-time high, which means there are unhappy shareholders if they took positions in that range. The company is considered one of the great innovators of our time, so it took quite a drop in share price and loss of interest among the growth crowd for the stock to cross into value territory, enticing value-oriented investors such as myself to take positions. The notion of “buy and hold” may be dead to many investors, but to me Tesla is worthy for the long term.

Meta Platforms (META) (up 64% year to date) also has waded out of the doldrums early in 2023. A member of my 2023 Tax Loss Selling Recovery Portfolio, META is a name I likely never would have owned had it not become a candidate, and ultimately member, of that annual portfolio (I take positions in all the portfolio members). META shares bottomed out in the $89 range last November and closed above $200 on Thursday, surpassing that mark for the first time since last May. The name is also currently the best performer in that portfolio of 2022 losers.

Meta shares currently trade at 9.5x and 12x 2023 and 2024 consensus earnings estimates, respectively, and over the years Meta also has crossed into value territory. I was never interested in the stock, and it became the one that a brother-in-law still ribs me about. That’s because years ago, when asked about the name, I told him I did not like it. He bought shares, did very well and will likely never let me forget about it.

Unlike Tesla, however, I do not view Meta as a long-term hold.

The year is still early, but we’ll see if either or both Tesla and Meta can continue their respective recoveries.