Opinions
Larry Berman CFA, CMT, CTA
Evolve Automobile Innovation Index ETF Hedged
CARS-T
BUY ON WEAKNESS
Jul 26, 2021
$48.620
Stock price when the opinion was issued
E.T.F.'s
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BUY
The caveat for this ETF is that Tesla is grossly overvalued. The only reason for buying Tesla was for the inclusion in the S&P. They currently trades at $1.5M per car they will sell next year.
E.T.F.'s
TOP PICK
CARS' performance mirrors the rise and fall of e-cars of the past year, which returned shareholders a tidy 70%, though has flatlined year-to-date by barely rising 2%. Since bottoming in mid-May, the sector has been rangebound. CARS has been stuck between $45-50, stuck in no man's land when it was trading below $30 12 months ago, but plunged from $63 after Valentine's Day when e-car fever was hot. However, rangebound is sometimes a good time to enter an equity. Consider this a spec buy, but beware that the average daily volume is only 5,633 shares.
E.T.F.'s
Really likes this ETF. A third is exposed to semiconductors. Another third is car manufacturers such as Tesla or Neo. Then a third is batteries. It is equal weight so it does not rely on one single name. If we get a pull back, step in.