In this article, we will be taking a look at the 5 best electric vehicle stocks to buy now. To read our detailed analysis of six other top electric vehicle stocks as well as the sector as a whole, you can go directly to the 11 Best Electric Vehicle Stocks to Buy Now.
5. Ferrari N.V. (NYSE:RACE)
Number of Hedge Fund Holders: 33
Ferrari N.V. (NYSE:RACE) is a conventional automobile manufacturer planning to delve into the EV sector by 2025, as announced this July. The company expects to have 40% EV sales by 2030. Currently, it engineers and produces luxury performance sports cars.
An Outperform rating was reiterated on Ferrari N.V. (NYSE:RACE) shares on August 4, by analyst Tom Narayan at RBC Capital.
As of the close of the second quarter, Ferrari N.V. (NYSE:RACE) had an EPS of $1.4, beating estimates by $0.1. The company’s revenue was $1.3 billion, also beating estimates by $62.5 million. Over the next three to five years, Ferrari N.V. (NYSE:RACE) expects its EPS to rise by 11.5%, and it currently holds a one-year dividend growth rate of 57.1%.
Out of 895 hedge funds tracked in the second quarter. 33 hedge funds were long Ferrari N.V. (NYSE:RACE). Their total stake value was $870 million.
Ensemble Capital, an investment management firm, mentioned Ferrari N.V. (NYSE:RACE) in its first quarter 2022 investor letter. Here’s what they said:
“Ferrari (7.3% weight in the Fund): As WE DESCRIBED a year ago in this letter, Ferrari’s chief marketing officer’s hardest job is not getting people to buy a Ferrari, but to tell some of them no. The company is in the business of selling rare, luxury products and so by design they greatly limited the number of vehicles they sell. This extreme constraint has led to a wait list of well over a year with a customer base so devoted to the company that even in the midst of the Financial Crisis of 2008-09, the number of vehicles they sold only declined by 4%. Their customers are so price insensitive, that the company often sells out of their limited edition super cars that sell for millions of dollars before they even announce the price. For a Ferrari collector the high prices are a feature, not a bug, as it is the price that makes Ferrari ownership so exclusive.”
4. Rivian Automotive Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: 35
Rivian Automotive Inc. (NASDAQ:RIVN) is a manufacturer of EVs and accessories. The company provides five-passenger pickup trucks and sports utility vehicles.
Morgan Stanley’s Adam Jonas holds an Overweight rating on Rivian Automotive Inc. (NASDAQ:RIVN) shares as of August 12. The analyst also holds a $60 price target on the stock.
This August, Rivian Automotive Inc. (NASDAQ:RIVN) shares climbed over 90% from their 52-week low. Big name investors like Ray Dalio and David Einhorn have also increased their stakes in the company, making it an attractive EV stock.
There were 35 hedge funds long Rivian Automotive Inc. (NASDAQ:RIVN) in the second quarter, compared to 29 hedge funds in the previous quarter. Their total stake values were $1.6 billion and $3.9 billion, respectively.
3. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 46
Ford Motor Company (NYSE:F) is an automobile manufacturer providing Ford trucks, cars, sport utility vehicles, electrified vehicles, and Lincoln luxury vehicles. The company operates through its Automotive, Mobility, and Ford Credit segments.
A Buy rating was reiterated on Ford Motor Company (NYSE:F) shares by Michael Ward, an analyst at Benchmark, on August 1. The analyst also placed a $23 price target on the stock.
Ford Motor Company (NYSE:F) had an EPS of $0.7 in the second quarter, beating estimates by $0.2. The company’s revenue was $37.9 billion, also beating estimates by $2.7 billion. Ford Motor Company’s (NYSE:F) EPS is expected to grow by 52% over the next three to five years.
Ford Motor Company (NYSE:F) had 46 hedge funds long its stock in the second quarter. Their total stake value was $608.8 million.
2. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 72
Tesla, Inc. (NASDAQ:TSLA) is Elon Musk’s EV manufacturing company. The company also provides energy generation and storage systems in the US, China, and internationally.
Philippe Houchois at Jefferies reiterated a Buy rating on Tesla, Inc. (NASDAQ:TSLA) shares on August 27. The analyst also placed a $350 price target on the stock.
This August, Tesla, Inc. (NASDAQ:TSLA) moved forward with a 3:1 stock split to make the company’s shares more affordable. The stock gained by almost 2% and moved higher to about $302.3 when it began trading at the new price. Tesla, Inc.’s (NASDAQ:TSLA) EPS also represent growth potential, as it is expected to grow by 44.6% over the next three to five years.
Our hedge fund data shows 72 hedge funds long Tesla, Inc. (NASDAQ:TSLA) in the second quarter, with a total stake value of $7.2 billion. In comparison, 80 hedge funds were long the stock in the previous quarter, with a total stake value of $11.3 billion.
Baron Funds, an asset management firm, mentioned Tesla, Inc. (NASDAQ:TSLA) in its second quarter 2022 investor letter. Here’s what they said:
“In 2014, before we began to invest in Tesla (NASDAQ:TSLA), I called Roger to ask whether he thought Elon Musk’s electric car business would succeed. I did not believe that Roger, an owner of dealerships that sell cars powered by internal combustion engines (ICE) would likely have a favorable opinion of Tesla’s prospects. That was principally for two reasons:
- First, automobile manufacturing and distribution is unusually complicated, capital intensive, and highly regulated, which makes profitability problematic;
- second, cars with ICE motors require extensive annual maintenance, and dealer services revenues, not profits from automobile sales, are the most important contributor to profits of perpetual licensed ICE car dealerships.
Penske Automotive Group is principally an ICE car dealer. Since electric cars are powered by batteries and need little service, franchised dealerships are incented to sell ICE not EV automobiles. Further, Roger had been a long-term director of General Motors. General Motors’ ICE automobile business would be disrupted if Tesla were successful.
Regardless, I was right to have spoken with Roger. That was since he outlined numerous issues we needed to consider, study, and question before we determined whether we believed Tesla could be a successful business…before we ultimately chose whether to invest in that company.
When we completed our initial due diligence on Tesla, which diligence has been ongoing since 2014, we decided to invest $360 million in Tesla over the next two years. I then called Roger and outlined why I thought we could earn 20 times our capital over the next 10 years. Roger was so certain I was wrong that he offered to bet me $1 million that Tesla would fail. “Roger, I can’t bet you a million dollars. First, if you are right, I couldn’t afford to pay you. Second, if I’m right, you’re my friend, and I couldn’t take your money.” We settled on a dinner bet…”
1. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 75
General Motors Company (NYSE:GM) is another conventional automobile manufacturer that has begun manufacturing EVs such as the Chevrolet Bolt EV and the Bolt EUV. The company otherwise sells trucks, crossovers, cars, and automobile parts and accessories.
A Buy rating was kept on General Motors Company (NYSE:GM) shares on July 27, by analyst Michael Ward at Benchmark. Ward also placed a $60 price target on the stock.
This August, General Motors Company (NYSE:GM) reinstated its quarterly dividend at $0.09 per share. It also increased the company’s share buyback capacity to $5 billion of common stock, compared to the $3.3 billion figure previously set.
As of the close of the second quarter, 75 hedge funds were long General Motors Company (NYSE:GM). Their total stake value was $3.4 billion.
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