Top 10 ADR Stocks To Buy According to Hedge Funds

7. NIO Inc. (NYSE:NIO)

Number of Hedge Fund Holders: 20

Stock Upside Potential: 67.61%

According to Edge Funds, NIO Inc. (NYSE:NIO) is arguably one of the top 10 ADR stocks for investors who are eyeing exposure to China’s electric vehicle industry. The automaker offers a comprehensive ecosystem that goes beyond offering cars.

June saw a new monthly peak with 21,209 cars delivered, setting a monthly record. This trend continued into July, with deliveries once again surpassing 20,000 vehicles. NIO Inc. (NYSE:NIO) shipped out 20,498 cars, an increase of just 0.18% from the previous year’s total of 20,462 cars. July became the third straight month with deliveries exceeding 20,000 vehicles.

Its competitive edge stems from its array of electric SUVs, including ES6 and ES8 models. NIO Inc. (NYSE:NIO) also offers an indicative battery swapping technology. Nio achieved enhanced Adjusted EBITDA (1) figures both in a step-by-step quarterly manner and over the half-year period, in contrast to the previous year, despite ongoing challenges with the prices of rare earth elements.

Consequently, NIO Inc. (NYSE:NIO) is raising its guidance for the fiscal year 2024, aiming for Adjusted EBITDA) figures between $45 million and $50 million, marking a 20% to 35% increase from the previous year. This reflects the robustness of its downstream operations. Additionally, the firm is reaping the benefits of a strong quarter for its Rare Metals division, and the positive outcomes in Magnequench and the automotive catalysts sector are particularly encouraging.

While NIO Inc. (NYSE:NIO) has been under pressure, analysts remain optimistic about its long-term prospects, with an average price target of $6.52, implying a 67.61% upside potential from current levels. On the other hand, 20 hedge funds tracked by Insider Monkey held stakes in the company.