Profit Pregame

How GM is Jockeying to be a Leader in the EV Market

As we’ve discussed here in Profit Pregame before, the popularity of electric vehicles has exploded in recent years. In 2019, roughly 2.1 million electric vehicles were sold around the world, a 6% increase from the prior year.

The number of electric vehicles on the road has increased from just 17,000 in 2010 to more than 7.2 million in 2019.

While EV sales were down in 2020, much of that can be blamed on the pandemic. It’s clear that the growth in EVs is here to stay, and many of the world’s biggest automakers have begun to position themselves to meet the growing demand.

Last week, I highlighted the more than $35 billion investment that General Motors Company (GM) has made to increase EV production and advance its battery technology.

Well, yesterday GM announced yet another huge move to set itself up as one of the companies that will lead the charge to advance the EV revolution in the U.S.

As the popularity of electric vehicles continues to explode, we’re likely to see shortages of lithium, a key ingredient in producing the high-capacity batteries in EVs. In fact, experts predict that lithium demand will outstrip supply by 2025.

In an effort to increase the supply of lithium, GM announced on Friday that it is partnering with Controlled Thermal Resources (CTR) in a new operation that will produce more than 60,000 tons of lithium per year by 2024.

The moves positions GM as one of the most involved automakers in the production side of the EV manufacturing process, and could ensure that lithium supply constraints do not affect its ability to produce vehicles in the coming years.

So, if you’re looking to put some long-term investment money to work in the burgeoning EV space, it looks like GM is setting itself up to be one of the major players in the industry.

Trading tip of the week

Lots of investors struggle to identify when to enter and exit stocks.

I like to buy strong stocks on pullbacks and sell weak stocks on rallies.

Remember that the trend is your friend, and sticking with it is the best way to make money because, in the short-term, stocks are just a supply and demand curve.

Earnings report to watch

This Thursday, July 8, investors will get a glimpse of just how well the U.S. retail market has recovered thus far from the pandemic.

Like so many companies that rely on retail locations to support sales, Levi Strauss & Co. (LEVI) had a rough 2020.

But as malls and shopping centers have slowly reopened in the last few months, we’ve seen a resurgence in LEVI stock as it skyrocketed more than 118% since September 2020.

Analysts are predicting a massive improvement in revenue at around $1.2 billion – more than 143% up from the same quarter last year.

Keep an eye out for any disappointments in sales or EPS figures, though. At its elevated share price, LEVI may need to blow this earnings report out of the water in order to continue to push the stock higher. If any fundamentals come in below estimates, we could see the stock move lower in the short-term.

Tiny Island Holds Key to American Prosperity

Most people miss this at first glance – but a tiny island located just miles off the Vietnam coast hides the biggest story of the decade.

What engineers are working on here could trigger a new era of prosperity we haven’t seen since the invention of the railroad.

Billionaire hedge fund managers are starting to pour millions into this technology.

The mainstream media is distracted with stimulus money, infrastructure bills, and job reports… for now. But the five companies leading this tech’s development won’t stay under the radar much longer.

Check it out here.

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