Tesla, Inc. (NASDAQ: TSLA) was one of the most profitable stocks in 2020. Electric vehicle (EV) supplier shares received a huge boost as the world leaned towards higher stocks. This led to a surge in stocks as it looked like tech and electric vehicle stocks would do well now and in the post-pandemic future.
Investors today think there is still an opportunity. This is because the stock rallied to $ 900 per share and then fell in the new year. Since then, the stock has dropped about 20%, but that’s after a 922% rise last year! Therefore, it is not surprising that investors are still interested in this security.
However, I am not so sold. The main reason I’m a bit bearish about Tesla stock is the uncertainty about EV competition. On the one hand, it’s clear that EV companies will continue to grow in the next decade and beyond. Many companies have committed to building a full fleet of electric vehicles no later than 2040. Tesla is already there, putting it ahead of everyone else.
However, when these other companies join us, it creates a lot of competition for Tesla stock. This has already begun, especially in China, where the company is a major manufacturer and consumer of electric vehicles. Tesla continues to build high-end cars, but the real money is making those cheap options that anyone can afford.
So the reality is that we don’t know where Tesla will be in five or even ten years from here. Sure, this is an innovative company, but I’m not sure if it will become the main competitor of electric vehicles in the future. If you want to hold out for years to come, then by all means choose Tesla stock. But if you want the best EV options in this market, then check out these two top Canadian stocks as a watch list.
Instead of focusing on a car manufacturer, what about a company that builds everything for cars? This includes electric vehicles as well as all other products required for auto parts. This is what you get by investing with Magna International Inc. (TSX: MG) (NYSE: MGA).
US President Joe Biden intends to significantly increase funding for electric vehicles. This will now include Magna shares thanks to a recent joint venture with Lg electronics… The couple now boast of making interior equipment for electric vehicles, even providing electrical equipment for cars that use computers but may not be electric vehicles.
I am optimistic about Magna in the long run as it provides everything a car needs now and in the future. And he is associated with several companies, which means that he is dependent on more than just one type of car. As businesses and consumers continue to take greater care of the environment, the company should see huge growth in demand.
However, if you look at Magna stock, the company has an excellent valuation. The company’s sales volume is 0.8 times higher, and the book value is 2.3 times higher. That’s up from 21.1 and 29.9 for Tesla shares, respectively. This is a great price considering the stock is up 155% in the last year alone! And there is a bonus dividend yield of 1.91%.
While some stocks are recovering, the tech industry has sagged as the pandemic seems to be coming to an end in some way. In fact, a strong economic recovery could end the pandemic even sooner, which means that tech stocks could soon return to normal values.
That’s why BlackBerry Ltd. (TSX: BB) (NYSE: BB) is a good option for investors looking for strong growth. The company is associated with the electric vehicle industry through its QNX technology, which provides software for systems inside electric vehicles and other vehicles that have internal computers. Like Magna, car manufacturers can use this software without restrictions, so you have the opportunity to see growth from a wide range of companies.
The stock of the $ 6.78 billion company rose 137% after a huge 64% drop from 52-week highs. So there is likely to be a major rebound from its current share price over the course of the year and beyond. As more companies continue to opt for BlackBerry software, it won’t be unusual to see growth similar to 2020 in the coming years. And with a solid valuation 5.6x sales and 3.3x book value, that’s a big win today.
Still not sure about buying Tesla stock? Read this …
Is it worth investing $ 1,000 in Tesla right now?
Before considering Tesla, you may hear this.
Motley Fool’s Canadian chief investment advisor Ian Butler and his Stock Advisor Canada team just unveiled what they think are the 10 best stocks that investors can buy right now … and Tesla was not one of them.
The online investment service Motley Fool Stock Advisor Canada, which they operate since 2013, has more than tripled the stock market. And right now, they think there are 10 stocks to buy.
This article represents the opinion of an author who may disagree with the “official” recommendation of a premium service or Motley Fool consultant. We are Motley! Bidding on an investment thesis – even our own – helps us all to be critical about investing and make decisions that help us become smarter, happier, and richer, which is why we sometimes post articles that might not match guidelines, ratings, or other content. …
Wacky investor Amy Legat-Wolfe has no position in any of the aforementioned stocks. David Gardner owns Tesla shares. Tom Gardner owns Tesla shares. The Motley Fool owns shares and recommends Tesla. Motley Fool recommends BlackBerry, BlackBerry and Magna Int’l.