The EV Market Is Growing, Growing, Growing
The EV market is going to be one of if not the hottest growth story over the next few years. The total market is worth less than 3% of vehicle sales worldwide and expected to grow at a 35% to 45% CAGR over the next two decades. Based on what we’re seeing in the market today, that estimate could be far too low. The next five to ten years may see its CAGR in the triple-digit range before falling off over the next decade.
Canoo Seized Up For Partnership Opportunity
Canoo (NYSE:GOEV) is a great example of two trends within the EV market. The first is that start-ups and early-phase production companies are using SPACs to go public. The SPAC or special purpose acquisition company is the fastest and so far the surest way for these high-risk companies to go public and a means that will see more use in the year ahead. Canoo finalized its merger with Hennesey Capital Acquisition Corp IV in late December and seen a surge in shares prices if one laced with volatility.
Shares of Canoo got another jolt early in the week following a report it was in talks with Magna International (NYSE:MGA) over a manufacturing partnership. Magna International manufactures components, parts, and assemblies for OEMs worldwide and would be a help in achieving Canoo’s ultimate goal. The company has a number of vehicles in the design phase with its multi-purpose delivery vehicle slated for limited production sometime in 2022. The news is only the latest in a string of headlines linking up-and-coming EV names with higher-profile manufacturing partners. If completed Canoo’s truck would be competition for Workhorse Group’s C-series vans although Workhorse will have at least two years head start.
Magna International is a notable favorite of the analysts. The company has been making a series of next-generation initiatives that focus heavily on electrification, robotics, and 5G/smart-cities. Bank of America has the stock rated a buy and listed on not one but four of its thematic investments lists with long-term, secular tailwinds.
And The Next EV SPAC Is .... Lucid Motors
While Lucid Motors is not yet a publicly-traded company it soon will be. The company announced it was planning to go public this year and looking to do it via SPAC. The management company in question is Churchill Capital Corporation IV (NYSE:CCIV) and could complete within the 1st half of 2021. The deal is all the more exciting because Lucid Motors expects to begin production on its flagship model the Lucid Air this year and has a cheaper version lined up as well. While still early in the game, Lucid Motors could become a rival if not outright competition for Tesla and others looking to get into the sedan arena.
The Lucid Air is expected to sell for $77,400 before the federal EV tax credit. It comes with over 400 horsepower and a range of 406 miles. The higher-end Dream and Grand Touring models will go on sale as early as the 2nd quarter of 2021 while the lower-end base-model may not come to market until 2022. Execs are hoping to make a deal with Daimler for sales and distribution rather than compete in the market directly but, either way, this is definitely one EV company to keep an eye on.
Companies Mentioned in This Article
Compare These Stocks
Add These Stocks to My Watchlist
10 Great Cheap Stocks to Buy Now for Under $10
As the P/E ratios of most S&P 500 companies look very expensive and the stock market continues to hit new all-time highs regularly, it's challenging for investors to find cheap stocks to buy now.
This goes for both share price since most stocks are trading higher on a per-share basis and valuation relative to earnings. Right now, the typical S&P 500 company is trading at about 25 times forward-looking earnings. Historically, S&P 500 companies have traded at about 15 times earnings in more normal markets.
While the S&P 500 as a whole is expensive, there are still a handful of undervalued stocks trading at less than $10.00 per share. Value investing opportunities for value exist if you know where to look. Putting together a list of cheap stocks to buy now requires looking into some smaller, riskier, unloved, or undiscovered parts of the market. These low-priced stocks might not look especially attractive today, but long-term investors stand to profit if they are willing to be patient and hold onto shares of these companies through multiple market cycles.
Some of these companies are great investing ideas because they're too small and too risky to attract most mutual funds and Wall Street money managers. Others have been beaten up by the market after a period of slowing earnings and profits but are now trying to turn around and bounce back.
You might find marijuana stocks, dividend-paying stocks, large-cap stocks, growth stocks, small-cap stocks, and even some bitcoin stocks in this list. While these low-priced stocks have many differences, these 10 stock picks all share a common characteristic, a super-low share price of $10.00 or less.
View the "10 Great Cheap Stocks to Buy Now for Under $10".