That’s according to Gina Sanchez, founder and CEO of Chantico Global, and Bill Baruch, founder and president of Blue Line Capital and Blue Line Futures. Amidst Tesla’s gyrations, they looked at the other side of the trade by checking in on two legacy automakers: General Motors and Ford.
“Neither of these stocks are showing much promise,” Baruch said Friday on CNBC’s “Trading Nation,” “but Ford is showing less to no promise.”
“This stock has been trending lower since 2014. It missed earnings,” Baruch said. “And, right now, it looks like … it’s heading to about $7 at least. So, I’d stay away from Ford.”
Ford shares closed nearly 2% lower on Friday at $8.11. The stock was down 8% for the week.
Sanchez shared Baruch’s sentiments on Ford, saying in the same “Trading Nation” interview that the company “stumbled” in the 2019 launch of the Ford Explorer, which “really hit their earnings,” worsening an already long-winded earnings decline.
“The story in Ford is really negative. However, it’s more expensive than GM, where all of that negative news is all priced in,” Sanchez said. “So, if I were to have to choose between Ford and GM, I’d go with GM. They are better priced.”
Baruch agreed, pointing to some constructive signs in GM’s long-term chart.
“It’s showing some promise,” he said. “They did beat earnings. It was a tough fourth quarter. The stock has a nice trend line that comes in just above 33, and I’d like to think, at least in the near or intermediate term, it can [bounce] off of 33.”
GM ended trading on Friday down just over 2% at $33.63.
As for Tesla, which ran nearly 50% from Monday to Tuesday, then reversed course to end the week at $748.07, up just 14.5%, the traders felt it best to steer clear.
“You do not need to be trading Tesla despite what the headlines tell you or what people on Twitter are telling you,” Baruch said. “Stick to your investment game plan.”
While Baruch joked that he may “buy [Tesla’s] first test down to $420,” the level that got Tesla CEO Elon Musk into hot water with regulators via his now-infamous “funding secured” tweet, Sanchez wasn’t taking any chances.
“It will take not just a few years of 500,000-unit deliveries” for Tesla to make good on its overheated $135 billion valuation, “it will take decades,” Sanchez said.
“This is trading at Amazon-like prices, and people who are really, really invested in it believe it’s an Amazon-like story. But if you’re an investor who has less than 20 years of a time frame, you’re talking about a long time to actually make those earnings back,” she said. “That’s a huge price to pay right now, and you really have to be in it for the really long term.”
In short, “Tesla is risky,” she said.
Tesla is up nearly 79% year to date.