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Can Ford Compete in Electric Vehicles?

3 years 2 months ago
Ford (NYSE: F) has big plans for electric vehicles, but the company's efforts haven't gotten off to a good start. The Mach-E hasn't been selling well, and the F-150 Lightning isn't the hit the company hoped it would be. In this video, Travis Hoium goes over why Ford may not have
The Motley Fool

NIO, TSLA, or LI: Which EV Stock Earns Wall Street’s "Strong Buy" Rating? 

3 years 2 months ago
Sales of electric vehicles (EV) remain resilient despite macro challenges. Government incentives to boost EV sales and price cuts by leading automakers are driving volumes, even as fears of an economic downturn persist. However, growing competition in the EV space is impacting the profitability of automakers. We used TipRanks’ Stock Comparison Tool to place Nio ( NYSE:NIO ), Tesla ( NASDAQ:TSLA ), and Li Auto ( NASDAQ:LI ) against each other to find the EV stock which Wall Street finds more attractive. Nio (NYSE:NIO) Nio’s U.S.-listed shares have significantly underperformed rival EV stocks Tesla and Li Auto on a year-to-date basis. The company’s lackluster deliveries in recent quarters, supply chain issues, declining margins, and growing competition in the Chinese EV market impacted investor sentiment. However, shares have advanced about 17% over the past month due to the solid rebound in June deliveries and expectations of stronger sales in the second half of the year. Nio delivered 10,707 vehicles in June, reflecting a 17.4% year-over-year decline but a solid 74% jump compared to May. Nio’s June deliveries benefited from new models, mainly the ES6 built on the NT 2.0 platform. The company also launched ET5 Touring in mid-June and commenced the deliveries of the new ES8 in late June. Last month, the company implemented price cuts on its EVs, finally joining the price war triggered by Tesla. Nio has also decided to stop free battery-swapping services for new buyers. Last month, Deutsche Bank analyst Edison Yu reiterated a Buy rating on Nio with a price target of $13. Yu believes that Nio’s price cuts and the rapid rollout of new NT 2.0-based models could help the company’s sales “rebound considerably” in the second half of 2023, paving the way to generate a volume of 20,000 units per month. Is Nio a Buy, Sell, or Hold? With seven Buys and four Holds, Nio stock has a Moderate Buy consensus rating. The average price target of $10.38 reflects a possible downside of 2%. Shares have advanced 8.5% year-to-date.   Tesla (NASDAQ:TSLA) Earlier this week, Tesla reported better-than-anticipated Q2 revenue and earnings. However, shares fell as the company’s margins continued to decline due to aggressive price cuts to spur volumes. Tesla’s Q2 revenue grew 47% year-over-year to about $25 billion, while adjusted EPS increased 20% to $0.91. However, the company’s gross margin fell 682 basis points compared to the prior-year quarter to 18.2%, reflecting the impact of price cuts to boost demand. Further, the Q2 operating margin contracted 493 basis points to 9.6%. When questioned about the direction of margins during the Q2 earnings call, Tesla CEO Elon Musk contended that near-term variances in gross margin and profitability are “minor” relative to the long-term prospects. On Thursday, Goldman Sachs analyst Mark Delaney called Tesla’s Q2 results “solid” but cautioned that margins could remain under pressure in the intermediate term if the company lowers its EV prices further to drive higher volumes. The analyst reiterated a Hold rating on TSLA with a price target of $275 and stated that his positive long-term view on Tesla is already priced into the stock following its year-to-date rally. Is Tesla a Buy or Sell? Wall Street’s Moderate Buy consensus rating on Tesla stock is based on 12 Buys, 12 Holds, and four Sells. The average price target of $258.20 does not indicate further upside. Shares have skyrocketed 111% so far in 2023. Li Auto (NASDAQ:LI) Shares of Chinese EV maker Li Auto have jumped more than 81% since the start of this year. The company impressed investors with strong June deliveries of 32,575 vehicles, marking an increase of 150% year-over-year. The company’s June deliveries were higher than rivals Nio and XPeng ( NYSE:XPEV ). Overall, Li Auto’s Q2 deliveries increased 202% to 86,533. The company highlighted that deliveries in the first half of this year surpassed deliveries in full-year 2022.   Looking ahead, Li Auto is targeting 40,000 monthly deliveries in the fourth quarter. It is gearing up to launch its super flagship 5C BEV model, called Li MEGA, in Q4 and expects it to emerge as a leading model in the RMB 500,000 and higher price segment in China. Last month, HSBC analyst Yuqian Ding increased his price target for Li Auto to $43 from $38 and reiterated a Buy rating. The analyst expects the company's volume momentum to continue beyond Q2 due to “its strong delivery record and value proposition.” What is the Forecast for LI Stock? Li Auto earns Wall Street’s Strong Buy consensus rating backed by seven Buys and one Hold. The average price target of $40.66 implies 10% upside from current levels . Conclusion Analysts are more bullish on Li Auto than Nio and Tesla currently and see higher upside in the stock even after the robust year-to-date rise. Given the solid momentum in Li Auto’s sales volumes, expectations are high for the company to turn profitable this year. As per TipRanks’ Smart Score System, Li Auto scores an eight out of 10, implying that the stock could outperform the broader market over the long term. Disclosure
TipRanks

WINN ETF: Can You Really Win with This ETF?

3 years 2 months ago
The aptly-named Harbor Long-Term Growers ETF ( NYSE:WINN) is an actively-managed ETF focused on long-term growth stocks that has posted a sizzling gain of nearly 40% year-to-date so far in 2023. The ETF looks promising and has a lot going for it, but there are also some factors that investors should consider carefully before deciding whether WINN is the right choice for their portfolios. Let’s dive right into it.  What is the WINN ETF? WINN is an actively-managed ETF from Harbor Capital that “seeks long-term growth of capital by employing a proprietary combination of bottom-up, fundamental research and systematic portfolio construction,” according to Harbor Capital. The team behind WINN believes that “companies with sustainable competitive advantages have the potential to drive superior levels of long-term growth and generate strong returns for shareholders,” and it’s hard to argue with this logic. The fund launched in February of 2022 and has about $175 million in assets under management (AUM). WINN's Portfolio So, what type of portfolio does this bottom-up, systematic approach create in practice? See below for an overview of WINN’s top 10 holdings using TipRanks’ holdings tool. WINN holds 73 positions, and its top 10 holdings make up 57.6% of the fund. Top holdings Apple ( NASDAQ:AAPL ) and Microsoft ( NASDAQ:MSFT ) combine to make up nearly a quarter of the fund. The rest of the top 10 is dominated by the rest of the "Magnificent Seven" tech names, which are Nvidia ( NASDAQ:NVDA ), Amazon ( NASDAQ:AMZN ), Alphabet ( NASDAQ:GOOGL ), Tesla ( NASDAQ:TSLA ), and Meta Platforms ( NASDAQ:META ). Then, Eli Lilly ( NYSE:LLY ), Visa ( NYSE:V ), and Uber ( NYSE:UBER ) make up the remaining top holdings.  This is a relatively strong portfolio, as eight of the top 10 holdings feature Smart Scores of 8 out of 10 or better. The Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It gives stocks a score from 1 to 10 based on eight market key factors. A score of 8 or above is equivalent to an Outperform rating. WINN itself registers an impressive ETF Smart Score of 8 out of 10. Is WINN Stock a Buy, According to Analysts? Turning to Wall Street, WINN has a Moderate Buy consensus rating, as 76.64% of analyst ratings are Buys, 20.87% are Holds, and 2.49% are Sells. At $20.27, the average WINN stock price target implies 8.18% upside potential. What's Not to Like? So far, this sounds like a pretty good ETF, so what's not to like? For all the talk of bottom-up research and systematic portfolio construction, it’s hard to see real differentiation or alpha here based on WINN's portfolio. While it takes a research-heavy, active approach, WINN doesn’t look all that different from popular growth index ETFs like the Vanguard Growth ETF ( NYSEARCA:VUG) or the Schwab U.S. Large-Cap Growth ETF ( NYSEARCA:SCHG) when looking at its top holdings. WINN and VUG have 8 of the same top 10 holdings. Below, you’ll find an overview of VUG’s top 10 holdings, and if you looked at the table above showing WINN's top positions, it probably looks pretty familiar.  VUG's Top 10 Holdings Similarly, WINN and SCHG also feature 8 of the same top 10 positions. See below for SCHG's top 10 holdings. SCHG's Top 10 Holdings In fact, because the aforementioned "Magnificent Seven" stocks have grown so much in market cap this year, WINN’s top holdings look fairly similar to those of the broadest of broad market index ETFs, like the Vanguard S&P 500 ETF ( NYSEARCA:VOO) . Take a look at VOO's top 10 holdings below. VOO's Top 10 Holdings This isn't WINN's fault per se, but the level to which the Magnificent Seven stocks have grown this year makes them large components for many index funds. Because it includes these seven stocks, the challenge for WINN is that it does not offer much differentiation from these index funds. The further issue is that in addition to this lack of differentiation, it also charges a much higher expense than these funds. WINN’s expense ratio of 0.57% is orders of magnitude higher than those of VUG, SCHG (which both have expense ratios of 0.04%), or VOO (which has an even lower expense ratio of 0.03%).  So in year one, an investor initially investing $10,000 into WINN would pay $57 in fees, while an investor putting the same amount into VUG or SCHG would pay just $4. Meanwhile, an investor allocating the same amount to VOO would pay just $3. This wide gulf in fees really becomes even more pronounced over time. Assuming that fees remain the same and that each of these funds returns 5% per year over a 10-year investment horizon, the investor who initially invested $10,000 in VUG or SCHG would pay just a minuscule $51 in fees over the course of the decade. Meanwhile, the investor who allocated the same amount to VOO would pay an even lower $39 in fees, a total so low that you almost barely notice it over 10 years. However, an investor in WINN would almost certainly notice the $714 in fees they would pay for holding WINN for the same 10-year timeframe. This total is 18 times higher than the total expenses for VOO and 14 times higher than those of SCHG and VUG.  WINN's Performance Track Record As you can see, WINN doesn’t offer a lot of differentiation versus these low-cost index funds, but it is a lot more expensive than them. WINN only launched in 2022, so while its lack of a long-term track record is through no fault of its own, it can’t yet match the long-term performance track records that these popular ETFs have compiled for many years. For example, SCHG has beaten the market with a stellar 15.7% total annualized return over the past years, while VUG posted an impressive 14.9% total annualized return over the same time frame. The S&P 500 fund, VOO, has a total annualized return of 12.8% over the same time period. WINN may certainly one day be able to make this same case for itself, but for now, it will take a while before it can match the long-term track record of its more established growth counterparts.  Conclusion WINN looks like a solid ETF with a sound strategy, a favorable rating from analysts, and even an outperform-equivalent Smart Score. There isn’t really much of an issue with the ETF itself, and it could well be an ETF to keep an eye on in the future. However, for now, it’s hard to really see a compelling reason to invest in WINN ahead of larger, more established ETFs like VUG and SCHG, which offer much of the same exposure at a far lower cost and with a longer track record of results under their belts. Disclosure
TipRanks

Noteworthy Friday Option Activity: TSLA, DIS, GME

3 years 2 months ago
Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Tesla Inc (Symbol: TSLA), where a total of 3.4 million contracts have traded so far, representing approximately 335.9 million underlying shares. That amounts to about 2
BNK Invest

Why Tesla Stock Dropped 9% This Week

3 years 2 months ago
What happened Shares of Tesla (NASDAQ: TSLA) have fallen 9% this week as of 11:45 a.m. ET Friday, according to data provided by S&P Global Market Intelligence, largely driven by the market's response yesterday to the electric vehicle maker's second-quarter results. While Tesl
The Motley Fool

1 Reason Tesla's High Stock Price May Actually Make Sense

3 years 2 months ago
Shares of Tesla (NASDAQ: TSLA) took a huge hit on Thursday, following the electric-car maker's second-quarter earnings report. Investors may be spooked by the company's narrowing profit margin and management's scant details on expected production volumes of the company's long-awa
The Motley Fool

Stock Market News for Jul 21, 2023

3 years 2 months ago
Wall Street closed mixed on Thursday following mixed earnings results of second-quarter 2023. Moreover, tight labor market data also bolstered market participants’ concern that the Fed may continue to pursue interest rate hike reg
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