In this article, we discuss the 5 fastest growing auto stocks in the world. If you want to read about some more auto stocks, go directly to 10 Fastest Growing Auto Stocks in the World.
5. NIO Inc. (NYSE:NIO)
Number of Hedge Fund Holders: 26
NIO Inc. (NYSE:NIO) designs, develops, manufactures, and sells smart electric vehicles in China. On September 1, NIO reported that its overall electric vehicle deliveries in August increased by 82% year-over-year to 10,677, which is also a slight improvement over July. Cumulatively, NIO has sold 238,626 electric cars, including over 107,000, in the most recent 12 months.
On December 20, Mizuho analyst Vijay Rakesh maintained a Buy rating on NIO Inc. (NYSE:NIO) stock and lowered the price target to $28 from $34, noting that a challenging auto-end market is expected globally into 2023, driven by high-interest rates, energy prices and financing rates affecting the affordability.
At the end of the third quarter of 2022, 26 hedge funds in the database of Insider Monkey held stakes worth $518.9 million in NIO Inc. (NYSE:NIO), compared to 25 in the preceding quarter worth $873.9 million.
In its Q1 2022 investor letter, Horos Asset Management, an asset management firm, highlighted a few stocks and NIO Inc. (NYSE:NIO) was one of them. Here is what the fund said:
“At the beginning of April, the CSRC (China Securities Regulatory Commission) announced possible changes in its regulation that would allow this inspection by foreign auditors, provided that the companies previously communicate to this body the state secrets that would be exposed, as well as the sensitive information that they might have to hand over, and the subsequent audit is carried out in a framework of collaboration with the CSRC. In short, a move in the direction desired by the SEC, although still far from the optimal result, that is, unrestricted access to information. While these negotiations between the two regulatory bodies are progressing, Chinese companies have to decide how best to preserve their interests. Other entities, such as the electric vehicle manufacturer Nio, have just started trading on this stock market.”
4. Rivian Automotive, Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: 30
Rivian Automotive, Inc. (NASDAQ:RIVN) designs, develops, manufactures, and sells electric vehicles and accessories. On October 4, Rivian announced its electric vehicle production and delivery numbers for the third quarter of 2022. During the period, the company produced at its manufacturing facility in Normal, Illinois, 7,363 BEVs, which is 67% more than in the second quarter. Deliveries amounted to 6,584, up 47% compared to the second quarter.
On December 20, Cantor Fitzgerald analyst Andres Sheppard initiated coverage of Rivian Automotive (NASDAQ:RIVN) stock with an Overweight rating and $22 price target, noting that the company gains from a unique product lineup, significant support from Amazon, and a private charging network.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Coatue Management is a leading shareholder in Rivian Automotive, Inc. (NASDAQ:RIVN) with 19.6 million shares worth more than $645 million.
In its Q3 2022 investor letter, Meridian Funds, an asset management firm, highlighted a few stocks and Rivian Automotive, Inc. (NASDAQ:RIVN) was one of them. Here is what the fund said:
“Rivian Automotive, Inc. (NASDAQ:RIVN) manufactures electric vehicles (EVs) for the consumer and commercial markets. We initially invested in the company when it was privately owned. Among the many things that differentiate this startup is its substantial cash balance and relationship with Amazon, which is both an investor in the company and the first customer for Rivian’s commercial van. Several positive developments contributed to share strength in the quarter, including the company’s announcement that production of its R1 pickup trucks and EV delivery vans increased nearly 70% over the previous quarter. Management also reaffirmed its production target of 25,000 vehicles for 2022. Despite raising the price of its R1 truck earlier this year, Rivian continued to see strong demand for its vehicles, demonstrated by 98,000 pre-orders for its R1 truck and SUV. Although we are pleased with the company’s progress, we liquidated our position as Rivian approached the high end of our market cap threshold and its relative valuation became less attractive.”
3. Ferrari N.V. (NYSE:RACE)
Number of Hedge Fund Holders: 31
Ferrari N.V. (NYSE:RACE) designs, engineers, produces and sells luxury performance sports cars. On November 2, Ferrari N.V. reported total shipments of 3,188 units, up 15.9% versus the third quarter of 2021. Net revenues were 1,250 million euros, up 18.7% versus the prior year. The product portfolio in the quarter included seven internal combustion engine models and three hybrid engine models, which represented 81% and 19% of total shipments, respectively.
On December 9, RBC Capital analyst Tom Narayan maintained an Outperform rating on Ferrari N.V. (NYSE:RACE) stock and raised the price target to EUR 265 from EUR 261.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Darsana Capital Partners is a leading shareholder in Ferrari N.V. (NYSE:RACE) with 1.3 million shares worth more than $231 million.
In its Q1 2022 investor letter, Ensemble Capital, an asset management firm, highlighted a few stocks and Ferrari N.V. (NYSE:RACE) was one of them. Here is what the fund said:
“Ferrari N.V. (NYSE:RACE) (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 waitlist of well over a year with a customer base so devoted to the company that even amid 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 supercars 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.”
2. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 47
Ford Motor Company (NYSE:F) designs, manufactures, markets, and services a range of Ford trucks, cars, sport utility vehicles, electrified vehicles, and Lincoln luxury vehicles worldwide. On October 3, Ford Motors announced the sales of its cars in the United States, reporting it sold 12,258 units of the Ford Mustang, a decrease of 16% compared to 14,676 units sold in the second quarter of 2021 and 22 units of the GT, an increase of 27% compared to 30 units sold in the second quarter of 2021.
On November 30, Citi analyst Itay Michaeli maintained a Neutral rating on Ford Motor Company (NYSE:F) stock and raised the price target to $14 from $13, noting that the new target represents modestly higher multiples reflecting Ford’s improved auto free cash flow conversion this year.
At the end of the third quarter of 2022, 47 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Ford Motor Company (NYSE:F), compared to 46 in the preceding quarter worth $608.8 million.
In its Q3 2022 investor letter, Leaven Partners, an asset management firm, highlighted a few stocks and Ford Motor Company (NYSE:F) was one of them. Here is what the fund said:
“In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as Ford (NYSE:F), have recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6% [2] from 7.2% in early August and slashing full-year profit growth to 4.5%.”
1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 88
Tesla, Inc. (NASDAQ:TSLA) designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems. In late August, the firm revealed that it had produced more than 3 million units on a global scale, 1 million of which were manufactured in China. The company has found that production, delivery and acquisition of parts is a lot simpler with three Gigafactories on three different continents making their own lithium-ion batteries.
On December 20, Evercore ISI analyst Chris McNally maintained an In-Line rating on Tesla, Inc. (NASDAQ:TSLA) stock and lowered the price target to $200 from $300, noting that Tesla has a leading EV gross margin advantage but it is impossible to ignore that the investors are already well aware of EV benefits but now must also battle test demand assumptions for ’23-25.
At the end of the third quarter of 2022, 88 hedge funds in the database of Insider Monkey held stakes worth $7.4 billion in Tesla, Inc. (NASDAQ:TSLA), compared to 73 in the preceding quarter worth $7.2 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Tesla, Inc. (NASDAQ:TSLA) was one of them. Here is what the fund 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. (click here to read more…)
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