Electric vehicle (EV) manufacturer Arcimoto, Inc. (NASDAQ: FUV)
stock is starting to awake after a month long range bound price compression. The momentum in EV stocks
continues to accelerate as Tesla (NASDAQ: TSLA)
shares continue to make new all-time highs even after being added to the benchmark S&P 500 index (NYSEARCA: SPY)
.The introduction of new NIO (NYSE: NIO)
et7 sedan at the NIO Day
2021 event is aimed at Tesla further spurring the momentum from Chinese EV makers
like Xpeng (NYSE: XPEV)
and Li Auto (NYSE: LI)
. Acrimoto is a U.S. EV maker planning to roll out its unique three wheel EVs addressing three different end users: recreational consumers, business delivery and emergency services. The company is transitioning from concept stage to deliverables. The unique design of the EVs make it a cross between a motor bike and micro-car produced for efficiency with dual motors and top speed of 75 mph and range of 102.5 city miles. Risk-tolerant investors seeking exposure in the nimble EV market can watch for opportunistic pullback levels on Arcimoto shares.
Q3 FY 2020 Corporate Update
On Nov. 16, 2020, Arcimoto provided fiscal third-quarter 2020 update for the quarter ending September 2020. Arcimoto total revenues were $683,895 for the quarter, up from $33,311 in Q3 2019. Net loss was (-$4.6 million) or a loss of (-$0.15) per share. The Company resumed production and delivery after pausing manufacturing due to COVID-19. Acrimoto delivered 31 vehicles and has received deposits on 4,000 EVs to date as the Company builds out its infrastructure. On Nov. 19, the Company commenced pilot programs including six departments with the City of Orlando including the Orlando Fire Department, Police Department, Code Enforcement Division, Permitting Services, Venues and Parking Enforcement. The Company is working with Munro & Associates to bolster manufacturing processes to produce 50,000 EVs a year within 24 months. DHL will enable the home delivery of Arcimoto vehicles nationwide. Acrimoto completed a $10 million common stock registered direct offering during the quarter to end Q3 with $17 million in cash.
Conference Call Takeaways
Arcimoto Founder and CEO, Mark Frohnmayer provided updates on the progress made in the quarter and the plans for mass production rollouts. Frohnmayer said, “The vision of Arcimoto is simply the rightsizing of the vehicle platforms that we use every day, rightsizing the platform to human scale… So the daily driving Fun Utility Vehicles, the Deliverator for last-mile delivery, Rapid Responder from those on the front lines and now the Roadster, which is out sort of halo product, pure fun machine that we’re incredibly excited about.” The Fun Utility Vehicle is in production, the Deliverator and Rapid Responder are in pilot. The Company teased the Cameo, the flatbed utility vehicle and the Roadster electric three wheel bike was just introduced. The Company projects 4 EVs produced per day by the end of Q1 2021 as the Company pushes to ramp up manufacturing.
On Nov. 20, 2020, Acrimoto raised $15 million with an institutional investor for a private sale of 1.132 million shares at $13.25. On Dec. 14, 2020, Arcimoto started taking non-refundable deposits for the Fun Utility Vehicle and the Roadster for pre-order customers in Florida, California, Washington and Oregon with deliveries planned for Q1 2021. On Jan. 6, 2021, the Company agreed to acquire a new 185,000 squeeze feet manufacturing site in Eugene, Oregon that will bolster its current manufacturing by 5X as it transitions to the mass production model. The closing is scheduled for Mar. 31, 2021. Risk-tolerant investors can look for entries at opportunistic pullback levels.
FUV Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provides a precision near-term view of the landscape for FUV stock. The weekly rifle chart is just starting to form a pup breakout above the weekly 5-period moving average (MA) at $13.77 as the weekly stochastic crosses up at the 60-band. FUV is trading between a daily market structure low (MSL) buy trigger above $13.75 and a daily market structure high (MSH) sell trigger below $15.61 just below the $15.68 Fibonacci (fib) level. The daily MSL/MSH channel illustrates the recent trading channel and Bollinger Band (BB) compression that’s been occurring since mid-December 2020. The daily stochastic is crossing back up through the 40-band as buying pressure builds up again as the BBs are starting to expand again. Since the BBs are still relatively tight, prudent investors can look for opportunistic pullback levels at the $14.18 daily 5-period MA/fib, $13.01 fib, $12.18 fib and the $11.46 fib. Keep in mind that $13.75 is the daily MSL that will be protected on pullbacks, so entries near that level can also be considered. If the MSL trigger breaks down, then the lower price pullbacks may test with the best overlapping pullback levels at the $11.46 overlapping fib. Upside trajectories range from $16.73 up to $23.26.
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7 Stocks That Will Help You Forget About the Fed
Normally when the Federal Reserve (i.e. the Fed) makes an announcement, the market reacts predictably. That’s due, in large part, to the nature of what the Fed normally announces. Will interest rates go up, down, or remain unchanged? And for their part, the markets have a pretty good idea what the Fed will do before they do it.
But the Fed’s announcement of August 26 was a little different. They talked briefly about interest rates (they’re staying really low for a long time). But they were more concerned about inflation. Well, the Fed is always concerned about inflation, but this time they really mean it. Basic economics says that low-interest rates should spur inflation.
However, the market has been defying conventional wisdom and the Fed is not getting the inflation they want. So the Fed has basically said that they’re letting inflation go rogue. If it goes above their target 2% rate, so be it. The Fed is done trying to hit a target.
At first, the markets cheered the news. Not only was the Fed not taking away the punch bowl, but they were also going to keep the low rate liquidity going for a long time!
But after a little while to digest things, investors are realizing they have to be grown-ups about this. And now investors are considering how to rebalance their portfolios for the remainder of 2020.
I don’t know about them, but if I were you I would target companies that have a high free cash flow (FCF). Whether it’s your personal finances or in evaluating a stock, cash flow is your friend.
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As institutional investors come back into the market, it’s time for you to reposition your portfolio for whatever comes next.
View the "7 Stocks That Will Help You Forget About the Fed".