The pandemic has led to an increasing number of stock market participants, particularly through Robinhood’s commission-free investing and trading app. This rise can be attributed to increasing unemployment in the country causing people to focus on investments for additional income. Also, with the pandemic-driven lockdown and a fear of a second wave hitting the country soon, people, primarily millennials, are spending more time indoors, and have taken up investing as a hobby. This, coupled with the soaring stock market, despite an economic recession, has caused Robinhood’s payment for order flow revenue to nearly double sequentially to $180 billion in the second quarter that ended June 2020. So, stocks on the Robinhood 100 List are now being treated as highly followed and popular.
As the general election day is nearing, the market is getting more volatile, primarily due to the fundamentally opposite views adopted by the two presidential candidates. However, with polls favoring Democratic nominee Joe Biden, the chances of the clean energy industry benefiting significantly over the upcoming years are high.
With stalled stimulus talks in the Congress over differences between the two parties, people are seemingly favoring Biden for his repeated focus on the coronavirus pandemic and its relief measures. His focus on establishing clean energy by 2050 has been resonating well with people, with an increasing awareness regarding climate change amid raging forest fires and floods across the country. He plans to make the United States a 100% clean energy nation by 2050 and restructure the nation’s infrastructure. To that end, Biden has outlined a $2 trillion investment plan to rebuild infrastructure and boost clean energy, with the goal of achieving the zero net carbon emission by 2035 in the power sector.
With clean energy being the focal point in his presidential campaign, a Biden presidency is expected to boost the performance of Robinhood stocks such as Plug Power, Inc. (PLUG), Tesla, Inc. (TSLA), and NIO Ltd. (NIO).
Tesla, Inc. (TSLA)
TSLA has been one of the best performing stocks during the pandemic, with a 402.3% gain year-to-date. TSLA revolutionized the electric car industry through its top-of-the-line products that have higher efficiency and durability. Its record high share price led to a 5-for-1 stock split on August 12th. The company reported profits for four consecutive quarters, following which analysts and investors speculated its potential inclusion in the S&P Dow Jones Indices. However, TSLA did not make the cut, leading to a huge sell-off.
TSLA Model S was tested to be the safest car ever by National Highway Traffic Administration upon launch. TSLA is currently planning to launch three new electric vehicles in the near future, including the Tesla Cybertruck and 2 electric cars. It is currently planning to expand in Indonesia to ensure a steady supply of nickel, a key component in manufacturing car batteries. TSLA has also entered into the solar roof business, with CEO Elon musk expecting it to become the next “killer product” in 2021. Total solar deployments in the third quarter that ended September 2020 more than doubled sequentially to 57 MV, while solar roof deployments tripled over this period.
TSLA is planning to invest up to $12 billion in electric vehicles and battery factories over the next two years, with manufacturing facilities in three continents. The company raised $4.5 billion through an at-the-market stock offering in September to fund its capital-intensive projects in the near future.
TSLA is reportedly planning to launch its products in India in 2021. With a huge population and thereby market base, this expansion is expected to ramp up the profits for the company. CleanSpark software and services company recently partnered with TSLA to use its batteries for a Microgrid project in South America.
TSLA reported impressive results in the third quarter, surpassing analyst expectations. This marked the fifth consecutive quarter of profits. Its EV deliveries increased 7% year-over-year (subject to operating lease accounting) in the third quarter that ended September 2020. Its revenue increased 39% year-over-year to $8.8 billion in this quarter, while gross profit rose 73% from the same period last year to $2.1 billion. TSLA’s net income and EPS rose 131% and 69%, respectively, over this period.
The consensus EPS estimate of $0.75 for the fourth quarter ending December 2020 indicates a 82.9% rise year-over-year. The company also has an impressive earnings surprise history, as it beat the street EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $9.5 billion for the ongoing quarter indicates 28.7% growth from the year-ago value.
On October 26th, TSLA CEO Elon Musk collected the fourth tranche of moonshot award following the company’s impressive third quarter performance. His total compensation under moonshot pay package is $11.8 billion to date, making him the largest gainer in the Bloomberg Billionaires Index.
TSLA has gained more than 615% since hitting its year-to-date low of $70.10 in March. The stock hit its 52-week high of $502.49 in September.
Plug Power, Inc. (PLUG)
PLUG is a leading provider of hydrogen fuel cell turnkey solutions, having applications in logistics and supply chain, electric vehicles, stationary power markets, etc. It is an original equipment manufacturer (OEM) dealing in proton exchange membrane (PEM) and fuel cell technologies.
Biden’s initiative to build a modern and sustainable infrastructure is expected to boost PLUG’s operations in the long term, as the former vice-president aims to build a zero-emission economy by 2050, if elected.
PLUG’s commitment to clean energy is not restricted to the United States. It recently announced developing three GenDrive fuel cell products for European industrial and material handling vehicles.
On September 24th, PLUG announced its collaboration with Apex Clean Energy to develop a green hydrogen network across the United States using wind power. This partnership is in tune with PLUG’s goal to decarbonize and use 50% green hydrogen across major industries in the country by 2024. It also partnered with Brookfield Renewable Partners (BEP) to acquire 100% of Brookfield’s renewable energy supplies.
PLUG announced a Memorandum of Understanding (MoU) for demonstrating Plug Power’s ProGen Fuel Cell engine in class 6 and class 8 vehicles, which are expected to hit the market by early 2021. PLUG developed a 1kW Progen Fuel Cell system for drone and robotics applications as well. The company has standing agreements with Universal Hydrogen and EnergyOR to develop hydrogen powered commercial aircrafts, automated guided vehicles, and unmanned aerial vehicles.
PLUG’s second quarter (June 2020) revenues increased 18.3% year-over-year to $68.1 million. Adjusted EBITDA increased 112.6% from the same period last year to $1.2 million. It delivered record gross billings of $72.4 million over this period.
The consensus EPS estimate for the third quarter that ended September 2020 indicates a 22.2% improvement from the year-ago value. The consensus revenue estimate of $110million for the about-to-be-reported quarter indicates 80.4% growth from the same period last year.
PLUG has gained more than 650% since hitting its 52-week low of $2.53 in March. The stock hit its 52-week high of $19.02 in October.
NIO Ltd. (NIO)
NIO is a Chinese electric car manufacturer which integrates next generation technologies and artificial intelligence for automatic driving EVs. It holds over a 23% market share in China, with projected sales of upwards of 110,000 units in 2020. NIO is well positioned to become a dominating player in the electric vehicle industry given its impressive holdings in the Chinese market, which is the biggest EV market in the world. The United States, a close second, should witness a surge in NIO vehicles as well, if Biden is elected.
NIO recently raised $1.3 billion through an American Depository Share offering, which is expected to contribute to the research and development of electric car ecosystems and automated technologies, as well as developing its global market presence. It also plans to buy back some of its shares from Hefei Investor Group, which previously bailed out the company with a $1.4 billion cash infusion.
NIO is the first company to launch a ‘battery as a service’ (BaaS) subscription model, allowing customers to purchase electric vehicles and battery packs separately. It is planning to launch its EVs in the European market by 2021. NIO aims to penetrate most important global markets across the world by 2023 – 2024, as announced by CEO William Li. It is currently planning to enter the European car market.
NIO’s vehicle sales and total revenues both increased 146.5% year-over-year to $493.4 million and $526.4 million, respectively, in the second quarter that ended June 2020. Gross profit of $44.3 million indicates significant improvement from loss reported in the prior-year quarter.
NIO’s deliveries for the third quarter that ended September 2020 indicates a 154.3% improvement year-over-year to 12,206 vehicles. In the month of September alone, NIO delivered 4,708 vehicles, representing a 133.2% rise from the year-ago value. NIO’s revenue grew 21.5% from the same period last year. The company’s deliveries grew for 7 consecutive months, reaching record highs in September.
The consensus EPS estimate indicates a 92.4% improvement over the prior-year quarter for the about-to-be-reported quarter. Moreover, NIO beat the street EPS estimates in three out of trailing four quarters, which bodes well for the stock. Analysts expect revenues to increase 146.7% year-over-year to $646.5 million for this period.
NIO has gained 547% year-to-date. The stock hit its 52-week high of $29.40 on October 16th.
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PLUG shares were trading at $14.74 per share on Tuesday morning, up $0.29 (+2.01%). Year-to-date, PLUG has gained 366.46%, versus a 7.01% rise in the benchmark S&P 500 index during the same period.
About the Author: Aditi Ganguly
Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don’ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities. More…
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