Analysis of Tesla, Apple, Microsoft, Diageo, Fevertree and Boohoo Group

  • GameStop short-selling controversy raises questions about use of leverage.
  • Appraising the story driving Tesla once more.
  • Quality stalwarts and growth companies in the round-up are looking robust. 

This has been a very strange week. Instead of people focusing on the outlook for company profits and the economy, the attention has been on a loss-making video games company called GameStop (US:GME) and other shares that have been heavily shorted by hedge funds.

GameStop shares are up by nearly 1,000 per cent in the last month and by 4,670 per cent in the last year. The business is forecast to make pre-tax losses of $170m in the year to October 2021 and is currently valued by the stock market at $13.8bn.

I can see why people might think GameStop is overvalued but we are not living in a world where loss making businesses with high stock market valuations are uncommon. If you lived and worked through the late 1990s tech and media bubble then what’s going on with GameStop will be nothing new to you and is something that is part and parcel of markets from time to time.

However, the message from this week’s goings on is a serious one that we should all be concerned about.

Moving onto companies that investors may want to buy and hold for the long term, this week’s round-up takes detailed looks at Tesla (US:TSLA) – which is a long-term play but has to make good on the faith investors have shown in it already, Apple (US:AAPL), Microsoft (US:MSFT), Diageo (DGE), Fevertree (FEVR) and Boohoo Group (BOO). 

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