Investors looking for cheap EV stocks may consider popular names like Mullen Automotive (MULN) and VinFast (VFS), which are trading at $2.53 and $0.02, respectively. These stocks are significantly cheaper than other popular names like Tesla (TSLA) and BYD. 

This article will explain why investors should avoid Mullen Automotive and VinFast, and buy XPeng (XPEV) instead. 

Mullen Automotive is under pressure

Mullen Automotive has been a fallen angel in the electric vehicle industry and is likely in its final days. 

Its stock has crashed by 99.8% this year, bringing its market cap to over $9.9 million. This is a tiny amount for a company that was once valued at over $700 million. It is also a small amount considering that it spent over $400 million a few years ago acquiring Bollinger Motors and Electric Last Mile Solutions (ELMS).

Mullen’s collapse has benefited many people who shorted the company. Data by SeekingAlpha shows that it has a short interest of 32%.

Mullen Automotive stock has reacted to several important news events in the past few weeks. On Monday, the company announced that its Bollinger subsidiary had received $10 million in debt financing from Robert Bollinger, its founder. 

Mullen also announced the creation of Mullen Credit Corporation, a firm that will provide financing to dealerships carrying its brand.

The company also estimated that its six-month revenue will be $75 million. It also announced plans to reduce $5.5 million in spending through job cuts and eliminating its passenger vehicle program, which stood no chance because of the rising competition in the sector. 

The challenge, however, is that Mullen Automotive has little cash in its balance sheet. It ended the last quarter with just $3.5 million in cash and short-term investments. This means that the company will need to either continue raising cash or even file for bankruptcy. 

VinFast is facing headwinds

VinFast stock price has also crashed by over 50% and by 26% in the last 12 months, bringing its market cap to $9.2 billion. 

It is a Vietnamese company that manufactures electric vehicles and scooters. At its peak after going public, the company’s valuation surged to over $100 billion.

It offers a highly comprehensive suite of products across all segments. VF-3, its cheapest vehicle costs about $9,900, while VF-5 GOES FOR $19,000. Its most expensive vehicle starts at $66,200.

It does most of its manufacturing in Vietnam, where it runs a 335-hectare plant capable of manufacturing over 300k vehicles. 

The challenge for VinFast is that its business is not doing well. Its revenue rose to $340 million in the second quarter from $336 million in the same period. Also, the company’s net loss jumped to $736 million from $578 million in Q2 of 2023.

The company also lowered its guidance of the number of vehicles it expects to deliver. It now expects to deliver about 80,000 vehicles. It also announced a plan to adjust its North Carolina plant to 2028 and seek government financing. 

Therefore, there is a likelihood that VinFast stock price will continue falling in the coming months as challenges remain.

XPeng stock has more upside

I believe that XPeng, a Chinese company backed by Volkswagen, is one of the best electric vehicle stocks to buy today.

It has staged a strong recovery in the past few months as it jumped by over 85% from its lowest point this year. 

This performance is because of its strong growth, and the fact that China’s price wars have abated recently. The most recent financial results showed that its revenue rose from $697 million in Q2’23 to $1.11 billion last quarter. 

This revenue growth happened as the number of vehicle deliveries rose from 23,205 to 30,207, and the number of stores jumped to 611. 

XPeng is also growing its margins, with the gross figure rising to 14%. Additionally, it has ambitions to become a leading player in the eVTOL industry, with its Chinese plant having a capacity for making 10,000 cars a year. 

XPeng stock price analysis

XPEV chart by TradingView

The XPeng share price has done well in the past few months. It has rallied from the year-to-date low of $6.57 to $12. Along the way, the stock has formed a golden cross chart pattern as the 200-day and 50-day moving averages have crossed each other. In most periods, this is one of the most popular bullish signs in the market.

XPeng stock has also moved above the 23.6% Fibonacci Retracement point, which is a popular bullish sign.

Therefore, the stock will likely continue doing well, with the next point to watch being at $13.73, its highest point on September 30th. A move above that level will point to more gains, with the next point to watch being at $20, which is about 64% above the current level.

Read more: XPeng stock price analysis: technicals point to a 40% jump

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Starbucks (SBUX) stock price remained in a consolidation phase as traders waited for the first quarterly earnings under Brian Niccol. After the initial surge when he was appointed in August, the stock has embraced a wait-and-see approach as investors focus on his strategy release. 

Two new threats have come up

Starbucks, the biggest coffee chain in the world, is now facing two potential big risks in the US and China. 

First, there are rumours that Luckin Coffee, the fast-growing coffee chain in China, is considering launching new stores in the US. According to the Financial Times, the company plans to do that as soon as in 2025. 

Its initial focus will be in big cities that have large populations of Chinese students and tourists like New York and California.

Luckin has already started doing the groundwork for its launch, sponsoring some adverts in key sporting events. 

As such, there is a likelihood that the company will replicate its success in China to become a leading player in the US coffee industry.

A key benefit in its model is that it relies on franchises, which helps it to grow at a faster pace than other companies. This model has also helped it open over 20,000 stores a few years after it was launched. 

Another benefit is that Luckin Coffee has a long record of having a pricing advantage, while still maintaining higher margins. It has a gross and net profit margin of 55% and 7.16%, while Starbucks has 27.6% and 11.16%, respectively.

To be clear: Starbucks is still a well-liked brand in the United States, and there are chances that Luckin will not be as popular in the country. Many foreign companies that have attempted to win in the American market like Tesco, Sainsbury, and HSBC have not succeeded.

Cotti Coffee and rising competition

The second big threat that Starbucks will now contend with is that Luckin Coffee is not the only big competitor to fear. 

Cotti Coffee, a company that was established by Lu Xhengyao and Jenny Qian, who founded Luckin Coffee, has continued to gain market share in China. Recently, the company opened 10,000 stores in the country, less than three years after its launch.

Cotti Coffee has achieved this growth by replicating Luckin Coffee’s growth strategy. It has used the franchising model and focused on affordable prices. 

Therefore, Cotti Coffee is a threat to Luckin and Starbucks, because most of its stores are newer and its price more affordable. Also, the company is expanding to other countries in the Southeast Asian region. 

These new developments mean that the era where Starbucks was the only game in the coffee industry has ended. 

Starbucks earnings ahead

The next important catalyst for the Starbucks stock will be its quarterly results, which will come out on Wednesday after the bell.

These will be important results because they will be the first time that Niccol has addressed analysts in an earnings call.

He will likely share his views on what to expect, and some of the top strategies that he is working on. 

According to Yahoo Finance, analysts expect the results to show that Starbuck’s revenue were flat in the second quarter at $9.3 billion. Its earnings per share is expected to drop from $1.06 to $1.03

For the year, Starbucks’ revenue guidance will be $36.5 billion, a small increase from the $35.9 billion it made a year earlier. 

The other big issue with Starbucks is that it is relatively overvalued, especially for a company that is no longer growing. Its forward price-to-earnings ratio has moved to 25.64, higher than the S&P 500 average of 21. Its multiple has moved to the highest point in months.

Starbucks also has an enterprise value-to-margin ratio of 17, higher than other companies in the industry. These valuation metrics will not matter for now since investors are more concerned about its recovery and turnaround strategy.

Starbucks stock analysis

SBUX chart by TradingView

The daily chart shows that the SBUX stock price bottomed at around $71 earlier this year and formed a double-bottom pattern. This is one of the most bullish patterns in the market in most periods. It has now crossed the important neckline is at $82.95. The stock has now formed a golden cross chart pattern, a popular bullish market sign. 

However, the stock has formed a rising wedge chart pattern, a popular bearish market sign. Also, the Relative Strength Index (RSI) and the MACD indicators have formed a bearish divergence pattern.

Therefore, the stock, will likely have a bearish breakout after its earnings. If this happens, the next point will be $90. On the other hand, a move above the important resistance point at $100 will point to more gains.

The post Starbucks stock on edge as fresh threats emerge ahead of earnings appeared first on Invezz

Solana price continued its strong recovery this week, soaring to a high of $180, its highest level since July 31st. It has jumped by about 65% from its lowest point in September, giving it a market capitalisation of $84 billion, and a fully diluted value of $106 billion.

If Solana was a company, it would be the 160th biggest one globally. It would be bigger than companies like ABB, Shopify, Rio Tinto, and Lam Research. 

Closing the gap with Ethereum

Solana price has done well as the network continues closing the gap with Ethereum, a network that has dominated the industry for many years. 

Data shows that Ethereum has a big edge against Solana in many industries. For example, data by DeFi Llama shows that Ethereum has over 1,200 decentralized applications (dApps) in the DeFi industry, while Solana has 171.

Ethereum’s applications have a total value locked (TVL) of $50 billion, while Solana’s applications have $6.36 billion in assets. This means that Ethereum is about 8x bigger than Solana in this metric.

Ethereum is also much bigger than Solana in terms of stablecoins. It has over $83 billion stablecoins in its ecosystem, a figure that is substantially higher than Solana’s $3.7 billion.

Stablecoins have become the most important parts of the crypto industry, because of their role in money transfers. For example, it has been widely reported that highly sanctioned countries like Russia and Venezuela have embraced these coins to fund their trades. 

This happens because these stablecoins give them access to US dollars, which they may not have because of the substantial sanctions.

However, despite all this, there are signs that Solana is doing much better than Ethereum in terms of growth. 

First, the network has 7.2 million active addresses, a figure that is significantly higher than Ethereum’s 389,347. This means that Solana is more popular than Ethereum among users.

This happens because of Solana’s lower transaction costs and fast speeds, which are substantially ahead of Ethereum. This is shown by the fact that Ethereum’s fees this year have soared to $2.06 billion, while Solana has made $421 million.

Solana DEX volume is soaring

Second, Solana has become the biggest chain in the decentralized exchange (DEX) industry, an industry that Ethereum has dominated.

Data shows that Solana’s DEX networks like Raydium, Orca, Lifinity, Phoenix, and Drift. These DEX networks have handled over $51 billion in volume this month, the highest level since July.

Raydium processed $9.7 billion in the last seven days, while Orca, Lifinity, and Phoenix handled over $1 billion in assets in that period.  

Ethereum, on the other hand, handled $40 billion in October, with Uniswap and Curve Finance having the biggest market share. Only the two networks had a volume of over $1 billion, meaning that its network is dependent on Uniswap.

That is a big risk since Uniswap is now moving into the chain industry by launching UniChain, its layer 2 network, which will have lower costs and be more customizable. 

Solana’s growth is mostly because of its strong presence in the meme coin industry. Data shows that Solana meme coins have attracted a market cap of over $12 billion, a notable thing since its first meme coin, Bonk, emerged in late 2022.

Dogwifhat, the biggest Solana meme coin now has a market cap of over $2.2 billion, while Popcat, Bonk, and Cat in a dogs world have valuations of over $1 billion.

Solana meme coins have more volume than most mainstream coins each day. For example, its 24-hour trading volume was almost $3 billion, a figure that will keep growing in the near term. 

Solana has also become a big name in the Decentralized Public Infrastructure (DePIN) and artificial intelligence. Its network powers popular names in the DePIN industry like Render, Helium, and Hivemapper. 

Solana price prediction

SOL chart by TradingView

Technicals point to more Solana upside. On the daily chart, we see that the price of Solana bottomed at $110 in August as the Japanese yen carry trade unwound after the Bank of Japan delivered a surprise rate hike. 

Since then, it has bounced back, moving to a high of $180, its highest level since July 30th. It is also approaching the important resistance point at $210, the year-to-date high.

Solana has found a strong bottom at $122, where it failed to move below since April this year. Most importantly, it has now formed a golden cross as the 200-day and 50-day Weighted Moving Averages (WMA) happened. In most periods, a golden cross leads to more gains over time.

The Relative Strength Index (RSI) and other oscillators have continued rising. Therefore, the Solana token will likely continue rising as bulls target the year-to-date high of $210, which is about 17% above the current level.

The post Solana price forms rare bullish pattern, closes the gap with Ethereum appeared first on Invezz

Haleon (HLN) share price has retreated in the past few weeks, erasing some of the gains made earlier this year. Its London stock dropped to 375p, its lowest point since August 29, while its American ADR fell to $9.90, down by 7% from its highest level this year.

Haleon is a top FMCG company

Haleon is one of the biggest companies in the fast-moving consumer goods (FMCG) industry. It emerged from GlaxoSmithKline, which spun it off into an independent company in 2022.

Since then, other companies have done that. Johnson & Johnson created Kenvue, while 3M created Solventum, which focuses on wound care, oral care, and biopharma filtration. 

Other similar firms like Novartis and Bayer have considered those moves recently, a move that will help them to streamline their operations. 

Haleon is a major player in the FMCG industry, where it sells some of the biggest brands in areas like oral health, vitamins, minerals, and supplements, respiratory, pain relief, and digestive health. 

Some of the top brands in its portfolio are Sensodyne, Parodontax, Centrum, Theraflu, Panadol, and Advil. These are highly popular brands that are sold around the world.

Haleon and other firms in the industry have gone through a difficult time in the past few years. They have faced logistical challenges, high cost of raw materials, and weak consumer spending in most countries because of inflation.

In Haleon’s case, its annual revenue came in at $13.5 billion in 2020 and then dropped to $12.9 billion in 2021. It then bounced back and reached a high of $14.4 billion last year. 

Read more: 3M healthcare spinoff Solventum slides on NYSE debut

Haleon has solid fundamentals

Analysts believe that Haleon has some of the best fundamentals in the FMCG industry. For example, unlike Kimberly-Clark and Clorox, its brands are more defensible because it has a smaller threat from private label brands.

This is notable since more people select private label brands when shopping because they are of a higher quality and often cost much less. 

Additionally, Kenvue trades at a lower valuation metrics than other companies in the industry. It has a price-to-calendar year 2025 price-to-earnings metric of 20x, much lower than other popular brands.

For example, Church & Dwight, Beiersdorf, L’Oreal, Colgate-Palmolive, and Estee Lauder have a multiple of over 25. Similarly, other brands like Procter & Gamble and Clorox are more expensive than Haleon, despite its higher margins.

Haleon has a gross profit margin of 62.5%, higher than Kenvue’s 57.5%, Beiersdorf’s 58%, P&G’s 51%, Unilever’s 42.9%, and Church & Dwight’s 45%. Its EBITDA margin of 23% is also higher than the other companies. 

Additionally, its total returns have been relatively strong since May 2023. It has returned 16%, second only to Colgate-Palmolive, which has returned about 30%. It has beaten most of its peers in this period. 

Read more: Haleon (HLN) share price recovery faces one key hurdle

Haleon earnings ahead

The next important catalyst for the Haleon share price will be its earnings, which will come out on Friday. 

Its most recent half-year results showed that the company had an organic growth of 3.5%, with most of it happening in the second quarter. 

Most of the organic growth happened in oral health, VMS, and digestive health, whose organic revenue rose by 9.9%, and 9.2% and 4.9%, respectively. It was offset by a 4.4% and 2.3% drop in the pain relief and respiratory health segments. Haleon’s business did well because of a combination of higher volume and pricing.

Analysts expect this week’s results to show that Haleon’s revenue rose to £2,83 billion in the third-quarter. They also expect that its full-year revenue will be £11.2 billion, followed by £11.52 billion, and £12 billion in the next two financial years.

Its adjusted EBIT will also rise gradually from £2.5 billion, £2.63 billion, and £2.804 billion in the next three financial years. Therefore, the Haleon share price will do well if the company publishes strong financial results.

Analysts believe that the Haleon stock price is highly undervalued, with a 15% upside. 

Haleon share price analysis

Haleon chart by TradingView

The daily chart shows that the HLN share price peaked at the psychological point at 400p earlier this year. 

It has dropped below the 50-day Exponential Moving Average (EMA) and is inside the Ichimoku cloud indicator.

Haleon’s MACD indicator has pointed downwards and moved below the zero line. The Relative Strength Index (RSI) and the Money Flow Index (MFI) indicators have continued moving downwards. 

Therefore, the short-term outlook for the stock is moderately bearish, with the next point to watch being at 350p. Such a move will be bullish because it is known as a break and retest pattern, which is a bullish continuation pattern.

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