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High Potential Stocks In The Self-driving Cars Industry


Opportunities in the Market

Statistica reports that the market for self-driving vehicles continues to record considerable growth even in the presence of doubts on the part of consumers. Estimates show that the demand for partially autonomous cars by 2025 would be at about $36 billion and for fully autonomous vehicles, it is estimated to be at $6 billion.

With the look of things, there are so many other countries aside from the US that are making efforts to tap into the potential of the emerging market. Sources claimed that Pony.ai and Roadstar.ai are some Chinese companies that are beginning to up their games concerning their technology for autonomous cars in a bid to have local control of the market. It has further been highlighted that it will most likely be a profitable venture for the companies considering that the Chinese government has already expressed interest in having about 30 million autonomous cars working in the country within the next decade.

Pony.ai and Roadstar.ai are some Chinese companies that are beginning to up their games concerning their technology for autonomous cars in a bid to have local control of the market

With this glaring potential, tech enthusiastic investors have begun looking into the opportunities presented by the market. Specifically, some companies in this market have the combination of characteristics such as value, EPS revisions, LT momentum, growth and profitability which most investors put into consideration.

Although there are currently only a few publicly traded entities that get a considerable amount of revenue from the autonomous cars, they still play significant roles in the industry’s advancement. The CressCap has a systematic quant model which daily gathers data on 7,000 companies worldwide. It gives grades between A-F for each financial metric which are rated based on sector and region.

STMicroelectronics NV (STM-FR)

This company is actively involved in the development, manufacturing, and marketing of energy efficient and intelligent semiconductors globally. The stock of STM has earned a spot on the list because it possesses strong fundamentals. Over time, the company has been actively involved in the production of Bluetooth technology and GPS system technology for automakers. Similarly, sources claimed that STM is currently working on the development of chips capable of handling features such as micro-mapping, 360-degree detection actives night vision for autonomous cars.

The Chief Executive Officer and President of the company, Carlo Bozotti, reportedly stated that in the company’s earnings for this year’s first quarter, it recorded net revenue of $2.23 billion.

In addition to this, the combination of the company’s financial metrics is satisfactory. The EPS mark revisions of both FY1 and FY2 have A- on the CressCap grading which indicate the growth potentials of the stock. Analysts have also noted that the stock profitability has a good outlook.

Toyota Motor Corp (7203-JP)

The Japanese multinational manufacturer of automobiles earlier this year stated that the company would invest about $2.8 billion in a Tokyo based company to handle the building of software for self-driving vehicles. Sources also claimed that Toyota would commence the testing of those vehicles by 2020.

The EPS mark revisions of both FY1 and FY2 have CressCap A-grades which indicate the growth potentials of the stock of STM

The company’s goal is to advance beyond manufacturing cars that are autonomous, but also endowing them with artificial intelligence features that support feedback conversation between the car and the driver. CressCap highly rates the stock of the company as it ranks it 1 of 136 companies in the consumer discretionary sector of Japan. The recommendation of the company’s shares is attributed to its profitability metrics, impressive value, and EPS revisions.

Tianneng Power International Limited (819-HK)

The Hong-Kong based company deals with the manufacturing and sale of lead-acid batteries as well as other accessories related to battery. One of its products is the motive battery products used by electric cars.

The Investment holding company in 2015 based on customer satisfaction was awarded the best Chinese electric vehicle battery brand. The company’s interim report last year indicated that it had a revenue increase of 24.8% and a net profit increase of 13.6% compared to the record for a similar period last year.

The company attributes the strength of its performance to the robust demand of the local electric cars industry.  Analysts have recorded that its stocks look satisfactory on technical, fundamental and quant criteria. For instance, its total CressCap sector grade is A- and it ranks 78 out of 493 companies in the industrial sector of CressCap.

Sources also claimed that the stocks of the company are in high demand by investors. Also, the midterm and long-term outlook of its shares appear favorable as its midterm is at 19.84% compared to the sector’s -6.51%, and its long-term momentum is pegged at 67.94% as compared to the sector’s -3.17%.


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