There's also a VGM Score ('V' for Value, 'G' for Growth and 'M' for Momentum), which combines the weighted average of the individual style scores into one score. Ironically, it may be the U.S. market that will soon be begging for BYD cars, as well as EVs from NIO, Xpeng, and other Chinese OEMs. Strong vehicle sales should continue to attract more investors to BYD, which stands out as one of the more established Chinese electric vehicle companies. While our testing has found that a P/S ratio of <2 is the optimum range for returns, be sure to compare this ratio to its respective industry. ', referring to the nuclear power plant in Ignalina, mean? Entering text into the input field will update the search result below, ) is an under-followed Chinese EV maker that is active in a range of other businesses as well, and which has Buffett's Berkshire Hathaway (, ) as one of its top shareholders. Would My Planets Blue Sun Kill Earth-Life? The Price to Cash Flow ratio or P/CF is price divided by its cash flow per share. NIOs European expansion, ironically codenamed Marco Polo, is rumored to have already started. Most importantly, though, was the outline of Chinas ambitious Five-Year Plan released last week, in which domestic production of NEVs and technology is central to Chinas economic plans over the next five and 15 years. As China targets to become carbon neutral by 2060 and recently began to offer additional subsidies for the purchase of electric vehicles, it's safe to assume that the growth of the overall EV industry is only going to accelerate in the following years. Chinas fast-expanding middle-class population is also an advantage for BYD, especially in the luxury car market. Buffett's Berkshire Hathaway holds a stake of more than 8% in BYD, which makes the EV play one of Buffett's top 10 holdings. Cash Flow per share ($/share) calculates the amount of incoming cash vs. the amount of outgoing cash for a company. A stock with a P/E ratio of 20, for example, is said to be trading at 20 times its annual earnings. Am I exposed to currency risk when I invest in shares of a foreign company that are listed domestically? I do much more than just articles at Cash Flow Kingdom: Members get access to model portfolios, regular updates, a chat room, and more. How to interpret option trades in a stock pending buyout. What were the most popular text editors for MS-DOS in the 1980s? Earnings estimate revisions are the most important factor influencing stocks prices. In contrast, the net income that goes into the earnings portion of the P/E ratio does not add these in, thus artificially reducing the income and skewing the P/E ratio. All of those stocks are classified into three groups: Sector, M Industry and X Industry. Stop thinking Tesla Tesla Tesla, which makes fantastic electric cars, and shift your focus to the companies making EVs for the masses in the big EV markets. BYD has the cheapest EV battery in the industry, and it plans to sell its newest batteryBlade Batteryto other automakers. Partnerships have been formed with Norwegian importers, and BYD plans to expand to other Western European markets as NEV market share continues to rise. Our testing substantiates this with the optimum range for price performance between 0-20. BYDDF trades at HKD:USD conversion rate (0.13) of the HK shares, so that makes financial breakdowns in USD easier, and BYDDY trades at 2x BYDDF. The portfolio's price can fluctuate, but the income stream remains consistent. BYD reminds me way more of a chinese Tesla than NIO because BYD also has other fields they do things in . A higher number means the company has more debt to equity, whereas a lower number means it has less debt to equity. Thats all Ill say. In 2002, Berkshire Hathaway acquired a majority stake in Tellabs, a defense communications company. Electric buses have higher upfront costs than non-electric buses, but their total cost of ownership makes them significantly cheaper to operate. So the PEG ratio tells you what you're paying for each unit of earnings growth. Another advantage of BYD is that it ended Q1 with $2.1 billion in cash and with an interest coverage ratio of 5.5x it has more than enough resources to easily service its debt, reinvest available resources into its growth, and continue to pay dividends to its shareholders. Byddf and Byddy are both a contraction of "By Dear Foe , and both refer to the inventor's name, James B. Ford. BYD (OTCMKTS:BYDDF) stock is on the move today despite a lack of news concerning the electric vehicle (EV) company. Nevertheless, for value investors and valuation-conscious stock pickers, it seems like one of the best choices in the EV space. Is this happening to you frequently? This includes personalizing content and advertising. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. But note, different industries have different margin rates that are considered good. A value under 20 is generally considered good. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. A company with an ROE of 10%, for example, means it created 10 cents of assets for every $1 of shareholder equity in a given year. Buffett owns a 25 percent stake in BYD stock through his company Berkshire Hathaway. the fact that there was a large wave of new investors joining the market, many of them young and interested in potentially "disruptive" technologies. That means these items are added back into the net income to produce this earnings number. Where might I find a copy of the 1983 RPG "Other Suns"? Why do share prices obtained from models often differ than the actual stock price? I wrote this article myself, and it expresses my own opinions. That also holds true when we look at how its EV business alone could be valued if it were beloved by the market. Moreover, when comparing stocks in different industries, it can become even more important to look at the relative measures, since different stocks in different industries have different values that are considered normal. If you have questions feel free to ask them via direct messaging or through the comment section. A P/S ratio of 2 means you're paying $2 for every $1 of sales the company makes. I wrote this article myself, and it expresses my own opinions. The median P/B ratio for stocks in the S&P is just over 3. On top of that, while BYD's 5-year revenue CAGR was ~16%, the increase in popularity of EVs along with a stunning performance in Q1 signal that the growth of the top-line will accelerate as well in the following years and the street already expects the company to make over $30 billion in revenues in FY22. Did the drapes in old theatres actually say "ASBESTOS" on them? * indicates the important links in the menu. I wrote this article myself, and it expresses my own opinions. Zacks Style Scores Education - Learn more about the Zacks Style Scores. Please. Not all EV-related stocks felt the same love over the last year, however. Our investments include short sales of common stock. And if you are looking for a BYD vs. Tesla (TSLA) comparison, read that article first. Copenhagen appears to be the location of the first NIO House outside of China. cross between the bipolar and MOSFET transistors, 13 million miles of zero-emission operations. Now that it has, BYD is right where it wants to be. I would look to accumulate these . Unbeknownst to many, BYD is one of the top passenger EV manufacturers in the world. It's then divided by the number of shares outstanding to determine how much cash is generated per share. 2023 InvestorPlace Media, LLC. This translates to a 21% improvement in BYDs gross margin. Lets take a look at what investors interested in BYDDF stock need to know about the company. GDC Stock Alert: Why Is GD Culture Group Up 700% Today? Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Since my Seeking Alpha article BYD: Step Aside, Tesla last month, a lot has changed that will only add to BYDs bright future ahead. Please disable your ad-blocker and refresh. BYDDF stock trades at an NTM enterprise value to EBITDA multiple of 23.04x which looks reasonable considering the bloated valuations of other pure-play EV companies. A company like BYD comes once in a blue moon, and its stock is already up 398% YTD. This allows the investor to be as broad or as specific as they want to be when selecting stocks. Given that no company in the world makes more commercial NEVs than BYD, and few are planning any such electrified fleet of similar scale or depth, BYD may have even more market share of the 1.19 million commercial NEVs sold in China in 2025. How does the broker benefit from shorting stock? I have since visited the HQ 14 times, toured its largest battery factory in Kengzi, Shenzhen twice, toured dozens of its other factories across China, been to its offices in Los Angeles and New York City multiple times, and toured the Lancaster, CA bus factory. NIO is a play on the high-end electric car market while XPeng offers affordable electric cars. Conventional wisdom says that a PEG ratio of 1 or less is considered good (at par or undervalued to its growth rate). On top of that, using EV technology instead of diesel-powered vehicles will lead to lower local emissions and can thus translate to cleaner air. The most common way this ratio is used is to compare it to other stocks and to compare it to the 10 Year T-Bill. So it's a good idea to compare a stock's debt to equity ratio to its industry to see how it stacks up to its peers first. China has among the most favorable policies toward the electric vehicle industry in the world, which bodes well for BYD. This means that more and more batteries are needed, which means that the battery manufacturing business BYD is active in should do well, whether the EV leader in 2030 is Tesla, Volkswagen, or any other company. People may receive compensation for some links to products and services on this website. Octobers sales numbers were just released: NEV sales grew 85% Y/Y in China, and PEV sales grew by 97% Y/Y. First, BYDDF and BYDDY are versions of BYD stock. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. Especially interested in electric vehicles, autonomous vehicles, 5G, telemedicine, batteries, clean water, and renewable energy. That includes whats happening with Phunware(NASDAQ:PHUN), EVgo(NASDAQ:EVGO), and Ensysce Biosciences(NASDAQ:ENSC) shares today. This seems like a very reasonable comparison, as BYD's EVs are not at all cheap entry-level cars, unlike some of the offerings by other Chinese EV manufacturers. While we dont have the breakup for China, according to Chinas Association of Automotive Manufacturers, the Elon Musk-led company sold 18,318 vehicles in February in China. This is, compared to legacy automakers such as Volkswagen (OTCPK:VWAGY), General Motors (GM), Ford (F), or Toyota (TM), still not a low valuation, though, as those mostly trade for 0.5-1 times sales. For now, BYD mostly sells its cars in its home market China, but exports to foreign markets have started and will likely continue to climb going forward, as BYD seeks to expand its international operations and gain market share in Europe, for example. For example, a company with a P/E ratio of 25 and a growth rate of 20% would have a PEG ratio of 1.25 (25 / 20 = 1.25). Zacks Rank Education - Learn about the Zacks Rank, Zacks Rank Home - Zacks Rank resources in one place, Zacks Premium - The only way to fully access the Zacks Rank. BYDDF is traded on Hong Kong Stock Exchange. Is this happening to you frequently? The company's financial condition is fair and its profitability is fair. BYD is on track to produce 415k vehicles across all powertrains and vehicle types. The Five-Year Plan stresses the role of commercial NEVs in meeting the 20% of new total sales. (Video) Secret BYD Insider information - BYD will 10X stock price by 2025 BYD also has developed and sells a monorail system called Skyrail, which is being deployed in a wide range of countries, including Brazil, Egypt, and China. Horizontal and vertical centering in xltabular. its investment since opening a stake in the company back in 2008. Offers may be subject to change without notice. Analysts Disclosure: I am/we are long BYDDF, NIO, XPEV, TSLA, BYDDY. I am not receiving compensation for it (other than from Seeking Alpha). ROE values, like other values, can vary significantly from one industry to another. By accepting all cookies, you agree to our use of cookies to deliver and maintain our services and site, improve the quality of Reddit, personalize Reddit content and advertising, and measure the effectiveness of advertising. ), so BYD has almost limitless battery partnership opportunities in the road ahead, especially because it has the cheapest and safest battery in the industry. When it comes to buying BYD stock, it can be a little confusing for some investors trying to figure out the difference between BYDDF and BYDDY. Offers may be subject to change without notice. BYDDF stock versus 50 and 200-day moving average. Current Cash Flow Growth measures the percent change in the year over year Cash Flow. Value Style - Learn more about the Value Style. A sales/assets ratio of 2.50 means the company generated $2.50 in revenue for every $1.00 of assets on its books. First of all, it doesn't face the risk of a possible delisting in the future and it also won't be significantly affected by the possible US-China trade war in the future, as most of its business operates in China. BYD, NIO, and Xpeng are looking to break into the European market after finding success in China. The income number is listed on a company's Income Statement. In 2008, Buffett and company sold the . It's an integral part of the Zacks Rank and a critical part in effective stock evaluation. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc. Only a few EVs currently use IGBTs, which is a cross between the bipolar and MOSFET transistors that typically older EV platforms like Tesla still use. While it's headquartered in Shenzhen, China, it has manufacturing facilities in China, the US, and in other parts of the world such as Brazil and Canada. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Asking for help, clarification, or responding to other answers. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Even though it is not as well-known as some of its peers, its shares still experienced strong gains over the last year, and in absolute terms, they look expensive. Considering this, we believe that the opportunities of owning BYD outweigh the current risks. Considering that there's currently a shortage of batteries, BYD will likely be able to improve the performance of its battery business in Q2, as very few automakers have the possibility of producing batteries in-house. BYD can't be described as inexpensive at all. It is certainly possible the U.S. will call on BYD for more than just electric buses in the future. Others will look for a pullback on the week as a good entry point, assuming the longer-term price changes (4 week, 12 weeks, etc.) So, as with other valuation metrics, it's a good idea to compare it to its relevant industry. This seems like an approach that could pay off in the long run. Chinese EV stocks including BYDDF, NIO, XPeng Motors, and Li Auto are popular among U.S. investors. Its Value Score of C indicates it would be a neutral pick for value investors. The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. Learn more about Zacks Equity Research reports. BYD is the only company that makes EVs of all classes. After the P/E ratio, it's one of the most common valuation metrics. It develops mostly full-electric and hybrid vehicles such as traditional sedans, SUVs, busses, forklifts, and even trains. BYD expects battery production capacity will reach 65 GWh by the end of this year, 75 GWh in 2021, and 100 GWh in 2022. Considering this, we believe that BYD is one of the most attractive EV companies on the market right now and purchasing its stock is a good way of exposing your portfolio to the EV industry. BYD figured this out almost two decades ago. I am not receiving compensation for it (other than from Seeking Alpha). Blade and in-house IGBT didnt really ramp until Q3 2020, for which BYD released results last week. BYD isnt the only Chinese EV maker eyeing the European market. The full plan will not be officially announced until March 2021, but the summary already outlines Chinas most aggressive NEV commitment. You may need to check with your broker to see if they also support the BYDDF stock version of BYD. It's packed with all of the company's key stats and salient decision making information. While Berkshire has experienced an impressive return on its investments in BYD in recent years, we believe that the growth will only accelerate in the following years, as the adoption of EVs will significantly increase this decade. Where and how do investors buy BYD stock and is it a good investment? The financial health and growth prospects of BYDDY, demonstrate its potential to perform inline with the market. A 'good' number would usually fall within the range of 1.5 to 3. Joe Biden has since been elected President, which could benefit. You will need to open an account with a broker that supports the stock, fund the account, and place your order for BYDDY stock. A change in margin can reflect either a change in business conditions, or a company's cost controls, or both. BYD Company ( OTCPK:BYDDY) ( OTCPK:BYDDF) is an under-followed Chinese EV maker that is active in a range of other businesses as well, and which has Buffett's Berkshire Hathaway ( BRK.A) ( BRK.B . A Biden America will only benefit BYD. The policy also advocates for improvements in EV components, more funding for efficient charging and battery swapping networks, and a better green car quota system to help OEMs transition to NEVs. This has been, still is, and certainly will continue to be what differentiates BYD the most. Others look for those that have lagged the market, believing those are the ones ripe for the biggest increases to come. In terms of unit sales, among NEVs sold this year in China, commercial vehicles account for 17%, and we think commercial vehicles could account for 24% of NEV sales in 2025 under Chinas new plans. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A strong cash flow is important for covering interest payments, particularly for highly leveraged companies. However, not having a direct presence in the US capital markets is also a good thing for BYD. What positional accuracy (ie, arc seconds) is necessary to view Saturn, Uranus, beyond? Site design / logo 2023 Stack Exchange Inc; user contributions licensed under CC BY-SA. A small portion of the firm's top line comes from the sale of rechargeable batteries. Investors looking for more recent stock market news will want to keep reading! The Value Scorecard identifies the stocks most likely to outperform based on its valuation metrics. BYD Auto was founded in 2003 following the acquisition of Qinchuan Automobile Company by BYD in 2002. The 1 week price change reflects the collective buying and selling sentiment over the short-term. BYD is thus, with relatively comparable offerings, taking market share versus Tesla. This will have them working together to create an EV similar to the Toyota Corolla. Conventional wisdom also has it that if the yield on the stock market (S&P 500 for example) is lower that the yield on the 10 Yr., then stocks would be considered overvalued. Copyright Chinese EV companies have been waiting for their chance to enter the U.S. market, and with a new president who embraces EVs and acknowledges Chinas technological success, their time may be here. I am not receiving compensation for it (other than from Seeking Alpha). BYD Co., Ltd. engages in the research, development, manufacture, and sale of rechargeable batteries and photovoltaic business. We expect BYDs passenger NEV sales in China to grow by 346%, Teslas by 162%, NIOs by 510%, and Xpengs by 629% over the next four years.