Electric vehicle stocks have been quite volatile since the start of the pandemic. Money initially shifted to specific green, forward-thinking industries such as EVs. However, the bull run didn’t last forever.
If you pay close attention to the EV industry, you are aware that it has the potential to be somewhat of a rollercoaster ride. It is not uncommon for stocks in this segment to fluctuate 5% to 10% weekly.
Arrival Limited (ARVL) and Canoo (GOEV) are two such volatile EV stocks. Each of these EV-makers has suffered quite a tumultuous slide in the past week. Let’s take a look at whether these two are oversold or if the declines are justified.
Arrival Limited (ARVL)
Arrival is not just the title of a bad science fiction movie. It is also the name of an electric vehicle-maker. ARVL’s EVs are somewhat unique in that they are made with the company’s innovative and patented technology. Previously known as CIIG Merger Corporation, ARVL is headquartered in London, UK.
ARVL has an overall grade of F, which translates into a Strong Sell rating in our POWR Ratings system. The stock has grades of F in the Quality, Sentiment, Value, and Growth components of the POWR Ratings. Click here to find out how ARVL grades in the rest of the components, including Momentum and Stability.
A total of 62 stocks are in the Auto & Vehicle Manufacturers industry. ARVL is ranked 55th of these 62 stocks. However, you can find the top -ranked stocks in this industry by clicking here. ARVL has a beta of 2.0, so it is twice as volatile as the market. ARVL is currently trading within about a dollar of its 52-week low of $9.92.
GOEV makes groundbreaking EVs with a comparably versatile platform. GOEV’s customers use EVs for business and personal purposes. Located in New York, NY, GOEV previously conducted business under the name of Hennessy Capital Acquisition Corporation.
GOEV has an overall grade of F and a Strong Sell rating in our POWR Ratings system. The stock has grades of F in the Quality and Growth components and Ds in the Sentiment and Value components. You can find out how GOEV fares in the rest of the components, including Momentum and Stability, by clicking here.
Of the 62 stocks in the Auto & vehicle Manufacturers industry, GOEV is ranked in the bottom 10%, slotting in at 54th. GOEV is clearly trending in the wrong direction, dropping from $11 in June to $8 in July and all the way down to its current price of $6.35 in mid-August. In fact, GOEV is trending toward its 52-week low of $6.15. If valuations on EV speculative investments are cut even more, GOEV could face additional selling pressure.
It is also quite disturbing that GOEV reported a net loss of around $90 million for the prior year. The bottom line is it is simply too risky to invest in GOEV during its pre-revenue position.
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ARVL shares were trading at $10.76 per share on Thursday morning, down $0.15 (-1.37%). Year-to-date, ARVL has declined -61.74%, versus a 18.03% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
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