In this article, we discuss the 5 most popular EV stocks among famous hedge funds. If you want our detailed analysis of the EV market, go directly to 10 Most Popular EV Stocks Among Famous Hedge Funds.
5. Livent Corporation (NYSE:LTHM)
Number of Hedge Fund Holders: 27
For more than 60 years, Livent Corporation (NYSE:LTHM) has been engaged in providing lithium technology that has the potential to change the energy sector. Livent Corporation (NYSE:LTHM) produces energy storage and battery systems, among other related products, using performance lithium compounds that create long-lasting batteries which are an essential part of the EV ecosystem.
On November 4, Livent Corporation (NYSE:LTHM) announced Q3 earnings, posting an EPS of $0.03, missing estimates by -$0.01. The revenue came in at $103.60 million, outperforming estimates by $7.60 million, up 42.70% year-over-year.
Mizuho analyst Christopher Parkinson on November 9 raised the price target on Livent Corporation (NYSE:LTHM) to $31 from $26 and kept a Neutral rating on the shares following the “solid” quarter. According to the analyst, Livent Corporation (NYSE:LTHM) is clearly making progress with improving execution.
Robert Karr’s Joho Capital is one of the leading Livent Corporation (NYSE:LTHM) stakeholders from Q3, increasing its stake in the company by 14%, holding 4.27 million shares worth $98.75 million. Overall, 27 hedge funds in the database of Insider Monkey reported owning stakes worth $277.4 million in Livent Corporation (NYSE:LTHM) in Q3. This is compared to the same number of funds being bullish on the stock in the previous quarter, with stakes valued at $251.1 million.
4. Magna International Inc. (NYSE:MGA)
Number of Hedge Fund Holders: 29
Magna International Inc. (NYSE:MGA) is a Canadian mobility technology company that offers automotive systems like electrified powertrain technologies, components, and assembly modules to clients including General Motors Company (NYSE:GM), Tesla, Inc. (NASDAQ:TSLA), Ford Motor Company (NYSE:F), Toyota Motor Corporation (NYSE:TM), Tata Motors Limited (NYSE:TTM), BMW, and Volkswagen, among others. This makes Magna International Inc. (NYSE:MGA) one of the most popular and significant EV stocks among famous hedge funds.
Magna International Inc. (NYSE:MGA) announced Q3 results on November 5. EPS in the quarter totaled $0.56, missing estimates by -$0.16. The $7.92 billion revenue exceeded estimates by $66.37 million.
On November 12, Credit Suisse analyst Dan Levy lowered the price target on Magna International Inc. (NYSE:MGA) to $105 from $110 and kept an Outperform rating on the shares. He observed that a shift to EVs is impending in the global auto industry, which very possibly may last into 2024, and Levy feels auto suppliers like Magna International Inc. (NYSE:MGA) have a significant opportunity ahead to capitalize on a favorable cyclical opportunity.
Arrowstreet Capital is the biggest Magna International Inc. (NYSE:MGA) stakeholder from Q3 2021, holding 1.7 million shares worth $128.58 million. Overall, 29 hedge funds reported owning stakes in Magna International Inc. (NYSE:MGA) in the third quarter, valued at $444.70 million.
3. NIO Inc. (NYSE:NIO)
Number of Hedge Fund Holders: 30
Of the 30 hedge funds that were bullish on NIO Inc. (NYSE:NIO) in the third quarter, Simon Sadler’s Segantii Capital is one of the leading stakeholders of the company, increasing its stake in NIO Inc. (NYSE:NIO) by 70%, holding 3.57 million shares worth $127.2 million.
NIO Inc. (NYSE:NIO) is a multinational automaker from Shanghai, China, specializing in electric vehicles. In addition to that, NIO Inc. (NYSE:NIO) also offers smart batteries and mobility cloud technology that can detect the needs of users to provide an elevated automobile experience.
On November 9, NIO Inc. (NYSE:NIO) posted its Q3 results, reporting an EPS of -$0.06, missing estimates by -$0.01. The revenue jumped 122.23% on a year-over-year basis to $1.53 billion, outperforming estimates by $62.90 million.
Tiger Securities analyst Bo Pei initiated coverage of NIO Inc. (NYSE:NIO) on December 8 with a Buy rating and a $45 price target. The analyst stated that NIO Inc. (NYSE:NIO) is well positioned to benefit from the global EV trend in the coming decade and “become a major player in the field”.
2. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 60
Tesla, Inc. (NASDAQ:TSLA) is perhaps the first EV stock that made headlines before the automotive industry caught on to the electric vehicle trend, making Tesla, Inc. (NASDAQ:TSLA) one of the most popular EV stocks among hedge funds. Elon Musk’s Tesla, Inc. (NASDAQ:TSLA) is an electric vehicle manufacturer and a clean energy company based in Texas, that also offers storage batteries and solar products.
Cathie Wood’s ARK Investment Management is one of the largest Tesla, Inc. (NASDAQ:TSLA) stakeholders, with the hedge fund owning 3.95 million shares of the company worth over $3 billion. Tesla, Inc. (NASDAQ:TSLA) is the largest stock owned by Cathie Wood in Q3, representing 7.36% of her $41 billion portfolio. Overall, 60 elite funds were bullish on the company in the third quarter, holding total stakes worth $10.64 billion.
On October 20, Tesla, Inc. (NASDAQ:TSLA) disclosed earnings for Q3, posting an EPS of $1.86, beating estimates by $0.25. The $13.76 billion revenue increased 56.85% year-over-year, surpassing estimates by $54.61 million.
UBS analyst Patrick Hummel on December 8 raised the price target on Tesla, Inc. (NASDAQ:TSLA) to $1,000 from $725 but kept a Neutral rating on the shares.
The analyst observed that Tesla, Inc. (NASDAQ:TSLA) will probably continue topping growth and margins consensus expectations in 2022, having a significant advantage in a rapidly accelerating global EV market due to better access to chips and batteries through vertical integration. Tesla, Inc. (NASDAQ:TSLA) also enjoys 20% global BEV market share and industry-leading profitability.
Here is what Baron Partners Fund has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q3 2021 investor letter:
“Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, energy storage solutions, and battery cells. The stock contributed as Tesla continued to present strong deliveries growth and a meaningful improvement in profitability despite a complex supply-chain environment. Demand remains robust, new localized manufacturing capacity is expected to support more efficient growth, and the autonomous program is accelerating. We expect Tesla’s growing vehicle offering, battery technology, and energy businesses to drive meaningful growth opportunities.”
1. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 77
General Motors Company (NYSE:GM) is an American multinational automaker that is committed to zero emissions, and is using its Ultium Platform to transform the automobile industry, bringing about an all-electric future. The Ultium Platform will enable General Motors Company (NYSE:GM) to realize its ambition of offering 30 new EVs globally by 2025. General Motors Company (NYSE:GM)’s product portfolio currently includes brands like Chevrolet, Buick, GMC, and Cadillac.
Warren Buffett’s Berkshire Hathaway is the largest General Motors Company (NYSE:GM) stakeholder as of the third quarter, holding 60 million shares of the company, worth $3.16 billion. Overall, 77 hedge funds were bullish on General Motors Company (NYSE:GM) in Q3, with total stakes valued at $6.41 billion.
General Motors Company (NYSE:GM) posted its Q3 earnings on October 27. EPS in the quarter equaled $1.52, beating estimates by $0.55. The $26.78 billion revenue missed analysts’ consensus estimates by $1.10 billion.
On November 15, Wedbush analyst Daniel Ives stated that the General Motors Company (NYSE:GM) EV transformation story heading into 2022 is starting to get recognized. The growing appetite among investors for new innovative EV stories, the vertical integration capabilities of General Motors Company (NYSE:GM), and conversion of its massive customer base to electric vehicles in the coming years represents a transformational opportunity for the company in the near future. The analyst has an Outperform rating and a price target of $85 on General Motors Company (NYSE:GM)’s shares.
Here is what Miller Value Partners has to say about General Motors Company (NYSE:GM) in its Q3 2021 investor letter:
“Another name we’ve recently purchased and have grown incredibly excited about: General Motors (GM). GM is interesting on many levels. We see it as an attractive investment opportunity and it might be a microcosm of current markets, both past and prospective.
Tesla trounced GM over the last decade. Tesla rose 15,797% crushing GM’s 238% increase, which lagged the S&P 500’s 365%. Tesla came out of nowhere creating what many said was the best car ever made. A decade ago, no one saw that coming, including GM. GM’s historical strength led to arrogance. It completely dismissed the threat of any newcomer.
Where are we now? Expectations are entirely different. Tesla’s current price embeds 18 years of growth while GM embeds under one year (see a pattern in what we like?!). Tesla’s expectations look even loftier when you consider that in that 18th year, Tesla would be projected to earn $1.35 trillion revenues at very high, Ferrari-type margins. The largest automakers today generate roughly $250 billion revenues at less than half those margins.
Tesla’s priced to go where no man (or woman!) has gone before. It’s impossible for Tesla to meet these expectations with auto manufacturing alone. It requires something more. Bulls believe Tesla can dominate an autonomous driving future and make significant money on software subscriptions. We don’t have a view on this other than that Tesla needs to do so to be attractive at the current price.
Market expectations for GM, on the other hand, are muted. There appears to be no innovation or growth priced into the stock. Yet GM plans to launch 30 EV (electric vehicles) models globally by 2025 (Tesla has launched a total of 4). GM’s new electric vehicles, like the Hummer and Cadillac Lyric, are extremely impressive. It’s revamping its manufacturing production to be modular, allowing greater speed and adaptability. The entire culture has transformed from a stodgy, bureaucratic old manufacturer to a speedier, more innovative software-enabled automaker. GM currently employs 25,000 software engineers.
GM believes it can double revenues by 2030, and improve margins through software and services. GM currently earns $2 billion of high margin software and services revenue, which is more than Tesla. Cruise, GM’s majority owned autonomous company, recently detailed why it sees the potential for $50B in revenues within 6-8 years of its 2023 launch of the Origin vehicle. BrightDrop, its autonomous commercial vehicle unit, looks promising as well with the potential for $10 billion in revenues. We don’t think this optionality is reflected in the current price. Investors started to see the potential after GM’s recently analyst day. We can easily get values for GM more than double its current price of $58.
The contrast between GM and Tesla illustrates what we see more broadly in the market, which is why we see more opportunity in classic value names than in the secular growth names. After a decade of dominance, expectations for innovative and disruptive companies are quite high. Many classic value companies were caught flat-footed, but have invested heavily to catch up. Muted expectations don’t reflect their improved prospects.”
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