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3 Trades In Nio Stock To Take Advantage Of Recent EV Share Spikes
By: Investing.com | November 18, 2021
• Chinese electric vehicle maker NIO stock is down about 19.5% in 2021.
• Nio is a play on the growth of the Chinese EV market.
• Interested investors could regard NIO stock as a proxy for Chinese alternative energy shares as well as EV makers and invest for the long-run, especially if the price goes toward $37.5 in the short term.
Long-term investors in Chinese electric vehicle group Nio (NYSE:NIO) do not have much to report in 2021. So far this year, NIO stock is down almost 19.5%. By comparison, Tesla (NASDAQ:TSLA) has returned over 58% YTD.
NIO Weekly Chart.
NIO stock is currently at $39.35. It hit a record high of $66.99 on Jan. 11. And the 52-week range for the stock has been $30.71 – $66.99. The decline since January came to a halt on Oct. 6, when shares hit an intraday low of $33.17. Since then Nio stock has returned around 20%.
The recent run-up in NIO corresponds to the up move in other EV names as well as many Chinese technology stocks, which came under state scrutiny earlier in the year. Meanwhile, on Nov. 10, Rivian Automotive (NASDAQ:RIVN), the EV group backed by Amazon (NASDAQ:AMZN), started trading at an opening price of $106.75 (covered earlier this week). In a matter of days, RIVN shares, which are now shy of $148, have returned an eye-popping 38%.
Recent metrics highlight:
“A total of 2,65 million new EVs found new owners during the first half of 2021, an increase of +168 % compared to 2020.”
Similarly, sales in China have been extremely strong as “Chinese consumers bought 1.79 million electric vehicles over the first eight months of 2021, up 194% from the same period last year.”
Given the expected growth in the sector worldwide, Wall Street keeps a close eye on NIO shares.
What To Expect From Nio Stock
Among 25 analysts polled, NIO stock has an 'outperform' rating. The shares have a 12-month median price target of $57.99, implying an increase of about 46% from current levels.
The 12-month price range currently stands between $27-$86.99. Put another way, despite the recent rally in Nio shares, Wall Street remains optimistic for further upside.
Meanwhile, the stock’s P/S and P/B ratios stand at 12.07x and 16.25x. By comparison, the metrics for TSLA stock are 22.29x and 39.14x. And if we look at the ratios for the legacy automaker General Motors (NYSE:GM), we see 0.69x and 1.73x.
Readers who watch technical charts might be interested to know that NIO’s short-term technical picture is urging caution. Given the extent of the recent up move, there could be some profit-taking in the coming days. The $40 level should act as resistance.
Our expectation is for Nio to give up some of its recent gains and move toward $37.5, or even below. In such a case, there should be strong support between $35 and $37.5. Afterward, the shares would likely trade sideways while it establishes a new base, and possibly start a new leg up.
3 Possible Trades On Nio
1. Buy NIO Stock At Current Levels
Investors who are not concerned with daily moves in price and who believe in the long-term potential of the company could consider investing in Nio shares now.
NIO stock is currently at $39.35. Buy-and-hold investors should expect to keep this long position for several months, if not multiple quarters, while the stock makes an attempt toward $58, Wall Street's consensus estimate.
Readers who opt for this approach, but are concerned about large declines, might also consider placing a stop-loss at about 3%-5% below their entry point.
2. Buy An ETF With Nio As A Holding
Many readers are familiar with the fact that we regularly cover exchange-traded funds (ETFs) that might be suitable for buy-and-hold investors. Thus, readers who do not want to commit capital to Nio stock but would still like to have substantial exposure to the shares could consider researching a fund that has the company as a holding.
Examples of such ETFs include:
• Invesco Golden Dragon China ETF (NASDAQ:PGJ): The fund is down 28.4% YTD, and NIO’s stock’s weighting is 8.19%;
• First Trust NASDAQ® Clean Edge® Green Energy Index Fund (NASDAQ:QCLN): The fund is up 14.1% YTD, and NIO stock’s weighting is 6.77%;
• KraneShares Electric Vehicles and Future Mobility Index (NYSE:KARS): The fund is up 24.1% YTD, and NIO stock’s weighting is 4.45%.
3. Cash-Secured Put Selling
Investors who are bullish or would consider buying Nio shares at a level less than the current price could consider selling a cash-secured put option in NIO stock—a strategy we regularly cover. As it involves options, this set-up will not be appropriate for all investors.
A put option contract on Nio stock is the option to sell 100 shares. Cash-secured means the investor has enough money in his or her brokerage account to purchase the security if the stock price falls and the option is assigned. This cash reserve must remain in the account until the option position is closed, expires or the option is assigned, which means ownership has been transferred.
Let's assume an investor wants to buy Nio stock, but does not want to pay the current price of $39.35 per share. Instead, the investor would prefer to buy the shares at a discount within the next several months.
One possibility would be to wait for Nio stock to fall, which it might or might not do. The other possibility is to sell one contract of a cash-secured NIO put option.
So the trader would typically write an at-the-money (ATM) or an out-of-the-money (OTM) put option and simultaneously set aside enough cash to buy 100 shares of the stock.
Let's assume the trader is putting on this trade until the option expiry date of Feb. 18, 2022. As the stock is $39.35 at time of writing, an OTM put option would have a strike of $35.
So the seller would have to buy 100 shares of NIO at the strike of $35 if the option buyer were to exercise the option to assign it to the seller.
The NIO Feb. 18, 2022, 35-strike put option is currently offered at a price (or premium) of $2.55.
An option buyer would have to pay $2.55 X 100, or $255, in premiums to the option seller. This premium amount belongs to the option seller no matter what happens in the future. The put option will stop trading on Friday, Feb. 18.
Assuming a trader would enter this cash-secured put option trade at $39.35 now, at expiration on Feb. 18, the maximum return for the seller would be $255, excluding trading commissions and costs.
The seller's maximum gain is this premium amount if NIO stock closes above the strike price of $35.00. Should that happen, the option expires worthless.
If the put option is in the money (meaning the market price of NIO stock is lower than the strike price of $35.00) any time before or at expiration on Feb. 18, this put option can be assigned. The seller would then be obligated to buy 100 shares of NIO stock at the put option's strike price of $35.00 (i.e., at a total of $3,500).
The break-even point for our example is the strike price ($35.00) less the option premium received ($2.55), i.e., $32.45. This is the price at which the seller would start to incur a loss.
Cash-secured put selling is a moderately more conservative strategy than buying shares of a company outright at the current market price. This can be a way to capitalize on the choppiness in NIO stock in the coming weeks.
Investors who end up owning the shares of the EV maker as a result of selling puts could further consider setting up covered calls to increase the potential returns on their shares. Thus, selling cash-secured puts could be regarded as the first step in stock ownership.
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NIO (NYSE:NIO) Downgraded to "Sell" at Zacks Investment Research
By: MarketBeat | November 12, 2021
• NIO (NYSE:NIO) was downgraded by Zacks Investment Research from a "hold" rating to a "sell" rating in a note issued to investors on Friday, Zacks.com reports. They currently have a $44.00 target price on the stock. Zacks Investment Research's price objective points to a potential upside of 4.14% from the stock's previous close...
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$NIO Things are getting tight
By: TrendSpider | November 11, 2021
• $NIO Things are getting tight.
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$NIO Bull pennant setup with a monster volume shelf. Volume is drying up as price consolidates
By: StockChartArt | November 9, 2021
• $NIO Bull pennant setup with a monster volume shelf. Volume is drying up as price consolidates. 10 week sma looks ready to cross into the 40 week sma. Also the last time a candle closed above the 10 & 40 week sma was in early July. Looks ready for take off!
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Earnings Previews: Nio (NYSE: NIO)
By: 24/7 Wall St. | November 8, 2021
Nio
China-based EV maker Nio Inc. (NYSE: NIO) has added about 5% to its share price over the past 12 months. At one point in early February, the stock was up 50% but later dropped to 25% below the year-ago share price. It bounced higher in late June and fell again in early October.
Rising competition for EVs, especially recently from Lucid, has cooled enthusiasm for Nio, as did a weak report on October deliveries. What the company has to say about that when it reports earnings Tuesday afternoon could have a big impact on the share price.
There are 22 analyst ratings on Nio’s stock, and 18 of those are Buy or Strong Buy. At a price of around $43.80, the upside potential based on a median price target of $59.38 is about 35.6%. At the high target of $92.01, the upside potential is 110%.
For the third quarter, the consensus estimates call for revenue of $1.47 billion, up 12.4% sequentially and 120% year over year. Nio is expected to post an adjusted loss per share of $0.05, worse than the $0.03 per-share loss in the prior quarter and better than the year-ago loss of $0.12 per share. For the full year, the company is expected to report a per-share loss of $0.42, better than the $0.66 loss last year, on sales of $5.67 billion, up about 128%.
Analysts estimate that Nio will trade at 116.5 times earnings in 2023. Until then, it will not post a profit. The enterprise value-to-sales multiple is expected to be 12.0 in 2021 and 7.2 in 2022. The stock’s 52-week range is $30.71 to $66.99. The company does not pay a dividend.
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$NIO Things are getting tight...
By: TrendSpider | November 6, 2021
• $NIO Things are getting tight...
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Why Nio Stock Soared Today
By: Motley Fool | November 2, 2021
• Investors see bright days ahead for the electric-vehicle stock as its earnings day approaches.
Key Points
• Nio's orders hit record highs last month, and it's gearing up for several new launches in 2022.
What happened
After a muted start to the week, electric-vehicle (EV) stock Nio (NYSE:NIO) popped 4% Tuesday morning as investors tried to look beyond the dismal headlines that hit the stock momentarily on Monday and weighed in on the long-term prospects of the popular EV manufacturer.
So what
Investors in Nio were taken by surprise Monday when the China-based EV manufacturer reported a sharp decline in its delivery numbers for October even as arch rivals continued to race ahead.
XPeng's (NYSE:XPEV) October deliveries, for example, more than tripled to 10,138 vehicles. Li Auto's (NASDAQ:LI) October deliveries more than doubled to 7,649 vehicles. In sharp contrast, Nio delivered only 3,667 vehicles, down 27.5% year over year and a staggering 65% sequentially.
Nio blamed "restructuring and upgrades of manufacturing lines and the preparation of new products introduction from September 28 to October 15, as well as certain supply chain volatilities" for the drop in sales.
Here's what's happening today: Investors are looking past one dull month, considering it an outlier and not a true reflection of Nio's prospects. While the drop in its deliveries was disappointing, the reason behind the drop was not that concerning. In fact, Nio's upgrade of its manufacturing facilities last month confirms the company is on track to launch its luxury sedan, ET7, next year. Nio's SUV ES8 will also be available -- in Norway -- by March 2022.
Most importantly, Nio's order book continues to grow: It reported record orders in the month of October. Nio delivered a cumulative number of 145,703 vehicles as of Oct. 31. In comparison, XPeng's cumulative deliveries just topped 100,000 through October, and Li Auto's cumulative deliveries came in at around 96,500 cars.
Just last Thursday, Bernstein initiated coverage on Nio stock with a price target of $45 a share, citing strong growth in China's EV market. I second Bernstein's views on China's EV growth potential.
Now what
To be fair, it appears rivals are navigating the ongoing global semiconductor chip-shortage constraints better than Nio. Investors will want to stay updated about how well Nio is handling the chip shortage when Nio releases its third-quarter earnings on Nov. 9 after market close. Nio is expected to report strong numbers, with analysts projecting lower losses on more than twofold growth in revenue.
Nio, though, last projected its Q3 sales to be up between 88.4% and 104.8% and revenue to grow between 96.9% and 112.8% year over year. Keep those numbers in mind and mark your calendars as Nov. 9 will be a crucial day for investors betting on what I believe could be one of the hottest EV stocks to own for the next decade.
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$NIO Starting the week right into resistance!
By: TrendSpider | October 25, 2021
• $NIO Starting the week right into resistance!
Has held strong since the bounce off 2020 low
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$NIO keep on eye out this week retesting moving average and support it’s ready for a solid bounce and a next leg up
By: JoeyTradez | October 25, 2021
• $NIO keep on eye out this week retesting moving average and support it’s ready for a solid bounce and a next leg up
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NIO Power is a mobile internet-based power solution with extensive networks for battery charging and battery swap facilities. Enhanced by Power Cloud, it offers a power service
the system with chargeable, swappable, and upgradable batteries to provide users with power services catering to all scenarios.
NIO News
 NIO's Game-changer: Unveiling the 1,000 KM Range Electric Vehicle Battery | New Era in EV Technology! | |
 NIO featured on CNN |
Company Contact Information:
NIO. Inc. (China) P:862169083306
No. 56 Antuo Road Investor
Jiading Shanghai 201804 Relations
Website: www.nio.com
Twitter twitter.com/NIOGlobal
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News www.nio.com/news
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