As we enter the last month of the year, it’s perhaps the right time to start shortlisting stocks for the new year. Despite all the chaos this year, the market has fared pretty well thanks to a skyrocketing rally in tech stocks…
The upcoming year could be bullish for major sectors as the widespread distribution of a highly effective vaccine is expected to spark a rapid economic recovery. Experts believe that the economy will witness a V-shaped recovery. Morgan Stanley CIO Mike Wilson, who called the October pullback, has recently said that “the worst of the sell-off is over, and investors should buy stocks before prices rise in 2021.”
Hence, fundamentally-sound stocks could see significant upside in the coming year. Here are three such stocks that could surge in the new year: NIO Inc. (NIO), Plug Power Inc. (PLUG) and Silvergate Capital Corp (SI).
NIO Inc. (NIO – Rated “A” – Strong Buy)
NIO is a Shanghai-based electric vehicles producer known as the “Tesla of China.” The company designs, manufactures, and sells premium cars under the ES8, EVE, and EP9 brand names. It is also involved in the provision of energy and service packages to its users developing e-powertrains, battery packs, and other components. NIO has a strategic collaboration with Mobileye N.V. for the development of automated and autonomous vehicles.
NIO delivered 5,055 vehicles in October 2020 alone, recording a fresh monthly high with an increase of 100.1% year-over-year. The company has delivered 31,430 vehicles so far this year, rising 111.4% compared to the same period last year. Cumulative deliveries of ES8, ES6 and EC6, as of October 31, 2020 reached 63,343.
Total revenue increased 146.4% year-over-year to $666.6 million in the third quarter of 2020. Vehicle margin came in at 14.5%, compared to the quarter-ago value of 9.7%. NIO is still not generating profit. However, quarterly losses per share continue to narrow. The company reported an adjusted loss of $0.82 per share for the quarter, significantly improving from the quarter-ago loss of $1.08 per share.
NIO is immensely benefiting from its innovative Battery as a Service (BaaS) subscription model. The company has recently launched the 100kWh battery pack with battery upgrade plans. The cell-to-pack battery pack has realized 37% higher energy density than the previous 70kWh battery. Moreover, NIO is planning to launch its EVs in the European market by 2021. Hence, the market expects the company’s revenue to increase 116.2% in the current year and 87.1% next year. NIO’s EPS is expected to grow 58% in the current year and 31.7% next year.
How does NIO stack up for the POWR Ratings?
A for Trade Grade
B for Buy & Hold Grade
A for Peer Grade
B for Industry Rank
B for Overall POWR Rating
The stock is also ranked #3 out of 115 stocks in the China group.
Plug Power Inc. (PLUG)
PLUG is an alternative energy technology provider that engages in the design, development, manufacture, and commercialization of fuel cell systems for the industrial off-road markets worldwide. It provides hydrogen fuel cell turnkey solutions for the electric mobility and stationary power markets.
PLUG has been on an expansion spree lately. The company recently announced the pricing of an upsized offering of its common stock worth $845.5 million, at an 11% discount to PLUG’s closing price, on the announcement day. The company expanded its CE-certified GenDrive product line last month with the addition of three new fuel cell solutions designed for European industrial and material handling vehicles. Additionally, PLUG completed acquisitions of United Hydrogen and Giner Elx in the second quarter to accelerate its green hydrogen strategy.
PLUG generated a net revenue of…
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