This Giant Pension Fund Is Doubling Down on EV Stocks

Source: VadymG / Shutterstock

California’s State Teachers’ Retirement System (CalSTRS) appears to be increasingly bullish on various EV stocks. The pension fund loaded up on various top players in the second quarter, disclosing the stock trades in a Form 13-F filed with the Securities and Exchange Commission and made public recently.

Among the electric vehicle stocks CalSTRS bought during the second quarter were Rivian Automotive (NASDAQ:RIVN), Lucid Motors (NASDAQ:LCID) and Nikola (NASDAQ:NKLA). Rivian and Lucid both traded around 2% higher on the news, with Nikola seeing much greater gains of around 8% in today’s session.

In addition to adding these positions, CalSTRS also reported trimming its investment in Workhorse Group (NASDAQ:WKHS). Among the worst-performing EV stocks on this list, Workhorse has disappointed when it came to its earnings and guidance. Additionally, the company put forward proposals to increase its share count, something many investors don’t seem to have gotten on board with.

Let’s dive into what to make off all these moves and what this may mean for the EV sector overall.

This Pension Fund Remains Bullish on EV Stocks

California has been among the most EV-forward states out there and continues to show its love for the sector. The showing from California’s State Teachers’ Retirement System pension fund in adding to its Rivian, Nikola and Lucid investments is notable. Each of these companies remains far below their all-time highs, and each is now growing its deliveries and transforming into a business with real revenues and profit potential.

Of course, Rivian, Nikola and Lucid are also not without their issues. Reaching mass production of an electric vehicle, be it a consumer passenger vehicle, truck, or commercial vehicle, is expensive. Each of these companies has hit its own respective production roadblocks and has had to hit the financing well multiple times.

But looking at every success story in this sector (with Tesla (NASDAQ:TSLA) remaining the key example), a combination of tax credits and public/private investments is needed to create successful long-term players in this space. It appears to be the opinion of California pension funds that Tesla won’t be the only winner in this space. For investors in Nikola, Rivian and Lucid, that’s a great thing.

Today’s move higher in each of these EV stocks certainly makes sense, in my view. The more large institutional investors that jump aboard these companies, the better.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

Source link

Share with your friends!

Leave a Reply

Your email address will not be published. Required fields are marked *

You have not selected any currencies to display

Get The Latest Investing News
Straight to your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.

Thank you for subscribing.

Something went wrong.