Tesla’s first-quarter delivery figures settled the question of whether demand for electric vehicles would strengthen and reach critical mass. It has. Now, the question for investors is what is the best way to take advantage of the wave in the long term. Shares of Tesla Inc. TSLA, + 5.25% soared last year, but during 2021, volatility has been painful for short-term investors whose timing has not been ideal. Here’s a price chart from the end of 2019:
(Set of facts)
That’s a nice graphic to look at, especially if it‘s been in stock the entire time. But Tesla shares fell 27% through April 1 from their intraday high on January 25. Then, on April 5, the stock rose as much as 7% following the company’s report that it had delivered 184,800 electric vehicles during the first quarter. Tesla is an expensive stock. The stock is trading at 147.5 times the consensus earnings estimate for the next 12 months, among analysts surveyed by FactSet. Among those 35 analysts, less than a third rate Tesla as a “buy” or its equivalent, and its 12-month consensus price target of $ 658.26 is slightly below where the stock closed on April 1. Tesla’s biggest competitors in the electric vehicle space in the US are likely to be General Motors Co. GM, + 3.97%, and Volkswagen AG VWAGY, + 2.14%, according to plans announced by the companies. But there are many other ways to play this long-term secular trend. Semiconductor manufacturers will continue to benefit from the growth of electric vehicles and all types of components. Here’s a recent semiconductor stock screen. For a broader list of EVs and related stocks that could have a significant advantage, we started by putting together a list of stocks held by one or more of these ETFs: We looked at the holdings of three ETFs: SPDR S&P Kensho Smart Mobility ETF HAIL, + 0.49% – 59 shares, higher stake: AgEagle Ariel Systems Inc. UAVS, -6.63% (5.6%). Global X Autonomous & Electric Vehicles ETF DRIV, + 1.66% – 77 shares, largest stake: Alphabet Inc. GOOGL, + 3.62% (3.6%). iShares Self-Driving EV & Tech ETF IDRV, + 1.93% —101 shares, higher participation: Intel Corp. INTC, + 2.48% (4.5%). The sum of the three portfolios and the elimination of duplicates produced a list of 175 stocks, 76 of which are listed in the US Among those 175 stocks, 111 are covered by at least 10 analysts. A wealth of opinions is good to take into account: If a company is not widely covered by the brokerage industry, it may be overlooked by institutional investors (or the few analysts who do cover it will pay for it). Among the shortened list of 111 stocks, here are the 20 with more than two-thirds of “buy” or equivalent ratings, with the most implicit upside potential for the next 12 months:
The stock prices and target prices in the table are in local currencies where the US stocks or depository receipts are listed. As always, this type of list is just the beginning; you should do your own research before investing in anything. To learn more about a business, including business profiles, charts, pricing relationships, finance, and news coverage, perform a stock search at the top right of the MarketWatch page. Plug Power Inc. PLUG, -5.96% is the stock with the most aggressive price target, and analysts are expecting a 75% gain over the next 12 months. The company offers hydrogen fuel cell services. Second on the list is Baidu Inc. BIDU, -1.41%, and analysts expect a gain of 59%. The company has partnered with Geely Automobile Holdings Ltd. GELYY, + 1.30% of Hong Kong to develop electric vehicles.