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The Tesla Value Case & Why Stocks Are Looking Volatile Again

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On today’s episode of Free Lunch, Ryan McQueeney covers volatility in Asian markets, trade war fears involving CAT, and positive earnings from LMT, MCD, and VZ. Later, he is joined by Brian Bolan to discuss today’s stocks selloff and a surprising bullish note on TSLA.

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Free Lunch is presented by Zacks Investment Research. It is streamed live, four times per week, and features breaking news and analysis from Zacks strategists. Free Lunch is available on YouTube, Facebook Live, Twitter, Ustream, and more.

U.S. stocks were down sharply in morning trading Tuesday, likely due to a cocktail of concerns about volatility in Asia, uncertainty in Italy, and ongoing trade war costs. These issues were underscored today by renewed selling in China and the EU’s decision to reject Italy’s budget, as well as Caterpillar’s (CAT - Free Report) lowered guidance.

On the first half of today’s show, Ryan recaps these headwinds, offering up both the key facts and his own read on sentiment. He also highlights earnings reports which were received positively this morning, including those of McDonald’s (MCD - Free Report) , Verizon (VZ - Free Report) , and Lockheed Martin (LMT - Free Report) .

Later, the host is joined by Zacks Strategist Brian Bolan to continue the conversation about today’s selloff. Bolan agrees with Ryan about the makeup of the market’s concerning cocktail, and he offers more perspective on the ongoing battle between bulls and bears.

Bolan also spends time highlighting Tesla (TSLA - Free Report) , which is surging right now as investors jump on a few interesting headlines related to the electric car giant. Notably, Tesla has moved its earnings report date up this week—implying good news to share—and noted short-selling firm Citron Research has officially switched its stance on the stock and now sees upside.

Using Citron’s new bullishness as inspiration, Bolan lays out the valuation case for Tesla right now. Traditional value investors might scoff at the idea of a profitless company being a value buy, but according to Bolan, recent trends in the stock’s P/S ratio, P/B ratio, and revenue estimates make a compelling case.

Finally, Ryan and Bolan cap off their conversation with a chat about upcoming earnings from Amazon (AMZN - Free Report) and Alphabet (GOOGL - Free Report) , as well as some speculation that the midterm elections could offer some respite from recent selling.

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