Tesla, Inc.

Tesla plows cash into R&D and factories, which is good for its future moat but limits near-term returns. However, corporate governance on capital allocation raises concerns. The board recently authorized massive stock awards to Elon Musk and proposed an unprecedented $1T package. These actions create huge share dilution.

While Tesla has made smart strategic investments, the outsized stock compensation drags on equity value. Overall we see mediocre efficiency – the business is investing heavily but at a cost to shareholders today.