In this article, we discuss 5 best EV materials stocks to buy now. If you want to read about some more EV materials stocks to buy now, go directly to 10 Best EV Materials Stocks to Buy Now.
5. Autodesk, Inc. (NASDAQ:ADSK)
Number of Hedge Fund Holders: 50
Autodesk, Inc. (NASDAQ:ADSK) provides design and engineering software services. The software services of the firm include products that cater to the specific computer numerical control machining, inspection, and modeling for the manufacturing needs of the electric vehicle sector. For example, the company offers customers the chance to use Fusion 360, a cloud-based product development software that combines design, engineering, and manufacturing in a single package.
On July 26, Oppenheimer analyst Ken Wong initiated coverage of Autodesk, Inc. (NASDAQ:ADSK) stock with an Outperform rating and a price target of $320, backing the firm to deliver durable earnings gains and consistent margin expansion in the coming years.
At the end of the first quarter of 2022, 50 hedge funds in the database of Insider Monkey held stakes worth $1.9 billion in Autodesk, Inc. (NASDAQ:ADSK), compared to 52 the preceding quarter worth $1.7 billion.
In its Q4 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Autodesk, Inc. (NASDAQ:ADSK) was one of them. Here is what the fund said:
“We added to Autodesk, Inc. (NASDAQ:ADSK) on share price weakness. Near-term concerns have made the valuations of the company quite attractive in our view. Autodesk has consistently reported solid results, but management recently provided lower than expected guidance, noting supply chain issues, inflation squeezing its customer margins, global labor shortages, and complications from rolling and unpredictable COVID lockdowns globally. In aggregate, these issues mean that fewer client projects have been completed, despite high endmarket demand. Ultimately, many of these productivity pressures will likely drive the need to digitize further.
To be clear, much of the pressure on Autodesk’s share price recently was due to expectations, not a decline in the fundamentals of the business. Autodesk, Inc. (NASDAQ:ADSK) continues to grow revenues at greater than mid-teens rates while simultaneously enjoying record renewal rates. While each of the noted factors present real challenges in the near term, we think the lower share price provides long-term investors an opportunity. Given the secular trend towards digitization and the ever-increasing mission-critical nature of Autodesk’s products, we are confident in the long-term investment case.“
4. Honeywell International Inc (NASDAQ:HON)
Number of Hedge Fund Holders: 50
Honeywell International Inc. (NASDAQ:HON) is a diversified technology and manufacturing company. The company makes and sells electric and hybrid-electric propulsion systems that are used in electric engines. These engines are used in electric vehicles. In late July, the firm posted earnings for the second quarter of 2022, reporting earnings per share of $2.10, beating analyst expectations by $0.07. The revenue over the period was $8.9 billion, beating analyst estimates by $280 million.
On July 29, JPMorgan analyst Stephen Tusa maintained an Overweight rating on Honeywell International Inc. (NASDAQ:HON) stock and raised the price target to $190 from $180, appreciating the second quarter earnings beat of the firm.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm DE Shaw is a leading shareholder in Honeywell International Inc. (NASDAQ:HON), with 2.1 million shares worth more than $415 million.
3. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Holders: 68
Freeport-McMoRan Inc. (NYSE:FCX) is an Arizona-based minerals and mining firm. The company mines and produces copper, a metal used extensively in the manufacture of electric vehicles. It also has interests in other materials used in EVs, like cobalt and lithium mining. These materials are used in the manufacture of EV batteries. The copper marketed by the firm is used in transmission lines for electricity, coils for electric motors, and battery components. All are used in EVs.
On July 22, RBC Capital analyst Sam Crittenden maintained a Sector Perform rating on Freeport-McMoRan Inc. (NYSE:FCX) stock and lowered the price target to $35 from $46, noting that a slowdown in demand was going to weigh on the shares in the near-term.
At the end of the first quarter of 2022, 68 hedge funds in the database of Insider Monkey held stakes worth $4.1 billion in Freeport-McMoRan Inc. (NYSE: FCX), compared to 66 in the preceding quarter worth $3.7 billion.
In its Q4 2021 investor letter, Horizon Kinetics LLC, an asset management firm, highlighted a few stocks and Freeport-McMoRan Inc. (NYSE:FCX) was one of them. Here is what the fund said:
“Those were some ideas about copper demand. Here are some specifics about supply. Global copper mine production in the 10 years from 2005 to 2015 rose 2.45% annually. In the next 5 years, to 2020, it increased by only 0.9% annually. Even ignoring the 2020 pandemic year, for the 4 years from to 2019, the expansion rate was 1.66%. We already have the historical context for this: the commodity price collapse prior to 2015, from a position of excess capacity.
What producers must do in that situation, because they have high fixed costs and debt expense, is curtail their exploration and development expenditures and reduce operating costs. They rely on existing mines, instead, and on their highest-grade ores and lowest-cost production. They might not actually reduce current production, but they aren’t replacing the reserves that are being slowly drawn down. You can see this at work at the individual company level.
Freeport-McMoRan Inc. (NYSE:FCX) will illustrate. It is the world’s third-largest copper producer, closely following Chile’s Codelco and Australia’s BHP Group. In 2014, even though Freeport sold more copper than the prior year, its revenues dropped by over 25%, and it went from $4.8 billion of operating earnings (a 22% margin) to a $(0.2) billion loss. The company’s capital expenditures peaked in 2014 at $3.86 billion and will be about $1.72 billion in 2021, meaning the company is spending 55% less now than it was seven years ago. In inflation-adjusted terms, it’s spending 61% less today than seven years ago…” (Click here to see the full text)
2. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 80
Tesla, Inc. (NASDAQ:TSLA) makes and sells electric vehicles and clean energy equipment. The firm is the largest EV firm in the world, both in terms of market capitalization and production numbers, although Chinese automakers like BYD have been catching up to it in recent months. The firm also aims to make its own EV batteries. The firm is expected to benefit from a recent climate change bill passed by US lawmakers that has extended tax credits for EV owners and provided more subsidies to EV firms.
On August 8, Canaccord analyst George Gianarikas maintained a Buy rating on Tesla, Inc. (NASDAQ:TSLA) stock and raised the price target to $881 from $815, noting that the firm had momentum and competitive lead from manufacturing to overshadow price concerns.
At the end of the first quarter of 2022, 80 hedge funds in the database of Insider Monkey held stakes worth $11.2 billion in Tesla, Inc. (NASDAQ:TSLA), compared to 91 in the previous quarter worth $12.9 billion.
Here is what ClearBridge Investments had to say about Tesla, Inc. (NASDAQ:TSLA) in its Q4 2021 investor letter:
“Within the growth universe we target, emerging growth stocks – the category with the highest revenue growth rates – significantly underperformed the overall growth categories in 2021 after leading performance in 2020. The pull-through effect on digitization, online access across industries, and spending to modernize outdated corporate infrastructures accelerated trends in a highly compressed time frame. Much of that trend slackened in 2021 and shares of these companies, while showing good top-line growth, saw slowing appreciation from the blistering pace in the prior year. With that moderating growth, multiples decelerated from 2020 highs. Bucking the headwinds among our emerging growth names was Tesla, Inc. (NASDAQ:TSLA) which saw continued sales momentum from their leadership positions in the key growth areas of electric vehicles.”
1. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 81
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. Semiconductor chips are one of the most critical components in an EV. This can be understood better after considering that a chip shortage over the past few months has resulted in large delays in EV production around the world. TSM, one of the largest chipmakers, has gained from the resulting chip price increases. These shortages are expected to last until 2023.
On July 14, Susquehanna analyst Mehdi Hosseini maintained a Neutral rating on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock and lowered the price target to $88 from $90, noting the revenues of the firm in 2022 made 2023 guides challenging.
At the end of the first quarter of 2022, 81 hedge funds in the database of Insider Monkey held stakes worth $10.1 billion in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), up from 72 in the preceding quarter worth $10.9 billion.
In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was one of them. Here is what the fund said:
“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) detracted in the first quarter due to rising geopolitical tensions, macroeconomic uncertainties, and concerns over softening demand for consumer electronics. We retain conviction that Taiwan Semi’s technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, and IoT, will allow the company to deliver above its 15% to 20% revenue growth target over the next several years.”
You can also take a peek at 10 Best Stocks for Animal Lovers and 10 Best Nickel Stocks to Buy Now.
