Oct 5, 2021
Super investor Cathie Wood loves Tesla.
But that doesn’t mean she’s holding on to every single share of it forever. In fact, her company Ark Investment Management recently went on a selling spree of Tesla shares.
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Ark’s exchange-traded funds — ARK Innovation (ARKK), ARK Autonomous Technology & Robotics (ARKQ), and ARK Next Generation Internet (ARKW) — sold over 340,000 of Tesla shares early last week, a stake worth roughly $270 million.
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Still, Tesla remains the top holding at ARKK, and Wood has a price target of $3,000 for the EV maker.
For investors who want a different way to invest in the EV space, here are three stocks worth considering — one of them might be worth buying with your spare change.
Nio (NIO)
Known as the “Tesla of China,” Nio has also become a huge name for U.S. equity investors.
Shares rose from $4.02 to $48.74 apiece in 2020, marking a staggering gain of over 1,100%. And thanks to the meme stock frenzy earlier this year, Nio continued to surge, reaching well over $60 in January.
Parabolic runs don’t last forever, and Nio has since pared some of the gains. Today, the stock trades at around $34.
While Nio shares have been on a rollercoaster ride, its business continues to expand at a very impressive pace. The company delivered 21,896 EVs in the second quarter of 2021, up 111.9% year-over-year and 9.2% sequentially.
That said, there is competition in China’s EV market. Companies like Li Auto and XPeng are also vying for a piece of the action.
And since Li, Xpeng, and Nio shares have all pulled back substantially from their 52-week highs, this could be a good time to put some digital nickels and dimes to work.
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Ford (F)
One of America's homegrown automakers, Ford shares tumbled in the pandemic-induced market sell-off in early 2020. But it has since made a strong comeback.
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In fact, Ford’s stock price has more than doubled over the past year alone.
As a company whose best seller is the F-Series pickup trucks, Ford isn’t exactly a pure-play EV stock.
But management is electrifying its lineup.
Ford introduced the Mustang Mach-E, a five-door electric compact SUV, in November 2019. The model went on sale in December 2020 and won the 2021 North American SUV of the Year Award.
Ford is also working on a fully electric pickup named the F-150 Lightning. Production is expected to begin next spring.
Of course, Detroit's other major automakers are also in the EV space.
General Motors has long had EVs in its lineup. Meanwhile Stellantis — the parent company of Chrysler — intends to invest about $35 billion in electric vehicles and new software through 2025.
Blink Charging (BLNK)
Rounding out our list is Blink Charging, a relatively underfollowed name in the world of EV stocks.
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But it has delivered very generous returns to investors.
At the beginning of 2020, Blink Charging was trading at less than $2 per share. Today, it’s at $26.98. You do the math.
What’s even more surprising is that Blink doesn’t make any electric cars. Instead, the company focuses on the charging side of the business.
Blink has deployed more than 24,000 EV charging stations and has over 190,000 registered members. It uses a proprietary-based software that operates, maintains, and tracks the EV stations connected to its network.
In the first half of 2021, revenue rose 129% from a year ago to $6.6 million.
The increasing adoption of EVs should continue to fuel massive growth in Blink’s business.
To be sure, EV stocks are some of the market’s most volatile tickers. And they’re not cheap.
Tesla trades at around $780 apiece.
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If you don’t want too much exposure to the segment, there is an app that allows you to buy fractions of shares with as much money as you are willing to spend.
The ultimate green asset?
The EV sector has been a favorite among investors concerned about sustainability.
But if you want to put money where your morals are, you don't have to limit yourself to the volatile stock market.
For instance, you might want to consider U.S. farmland.
It’s not nearly as exciting as EV stocks. But while the market often has a hard time determining the value of EV companies — which is why shares are often volatile — farmland is intrinsically valuable.
Over the years, agriculture has been shown to offer higher risk-adjusted returns than both stocks and real estate.
And new platforms allow you to invest in U.S. farmland by taking a stake in a farm of your choice.
You’ll earn cash income from the leasing fees and crop sales. And of course, you’ll benefit from any long-term appreciation on top of that.
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Jing is an investment reporter for Moneywise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.
