Stockchase Opinions

Stephen Takacsy, B. Eng, MBA The Lion Electric Co LEV-N WEAK BUY Jan 30, 2023

Leaders in their field and have a huge backlog, but they're losing a lot of money, since it's a capital-intensive business.  They recently raised some money, with Power Corp investing half that. If they keep growing at this rate, they will continue to need capital. If you believe in EV's, you have to be in for the long term. Not a bad time to buy it now, but risky.

$2.510

Stock price when the opinion was issued

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BUY ON WEAKNESS
The stock has declined recently, because it's been declining with the entire sector. The Lionel Electric deal will be good. He would add shares.
WAIT
Not in his tech fund; owned by individual clients. Good story, but it's gone into freefall. If you own it, hang on for dear life. Don't buy it down here. When it goes through $15, that will tell you the bottom has arrived.
HOLD
The whole group is down badly. But Lion is the best of the group. Hold onto it.
DON'T BUY
He does not prefer any of the EV names as the stocks are way ahead of themselves.
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TOP PICK
Based in Quebec, this maker of electric school buses and heavy trucks trades both on the TSX and Nasdaq and is a favourite of Mad Money's Jim Cramer. Lion has been on a roll so far this year. In January, Amazon ordered 2,500 trucks from them to be delivered over the next four years. Last month, Lion entered a credit deal worth US$100,000,000 involving National Bank among others, that will enhance the company's liquidity. At the same time, PEI ordered school buses from them.
RISKY
An overvalued EV stock. You don't know how high these stocks can go, especially when they're getting big orders. Innovative. Hard to value at this stage. Tremendously volatile. If things slow down, could get hit hard. Future looks bright.
DON'T BUY
The stock was one of the high flyers with other electric vehicle makers in Q1. Went public via SPAC. SPAC companies are often not great businesses in early days. There are no earnings. Stock price momentum has been weak. No earnings. Volatile.
DON'T BUY
Again, we're in a bear market. Story stocks do not do well. He'd put EVs as story stocks. These companies have caught everyone's imagination, but there's a lot of winnowing to do.
DON'T BUY

He sees it as a short. The stock has moved down for two years. The revenue growth has been impressive but not even close to profitable.