Invest With Companies That Can Win a Challenging Growth Trend

Most tech trends go through the same phases. First, there’s initial skepticism about whether or not a trend will play out. Once it does start to show some promise, rapid gains are made. But when rapid growth can’t be sustained, prices come back down.

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  • From there, companies that can continue to show real growth over time can lead to bigger profits. It may not be quick, but it can be rewarding.

    Right now, EVs are on the outs with investors. The rapid growth trend of the past few years has stalled out. Those who want to own an EV already likely own one.

    Plus, the high costs relative to a gas car, including charge time and limited range, have led many EV companies to struggle.

    But for diversified automobile manufacturer Ford Motors (F), it’s a different story. The company’s hybrid and fully electric offerings continue to sell well.

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  • Shares are still down 14% over the past year, even as Ford’s valuation has dropped to just 6 times forward earnings.

    Action to take: Investors looking for an EV play may perform well with Ford rather than the volatility from other EV offerings. Ford also pays a 4.1% dividend at current prices.

    For traders, the September $13.82 calls, last trading for about $0.34, could see high double-digit returns or better on a trend higher in the weeks ahead.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.

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