WhiteRaven Capital

2021-05-28 18:00:52 ​​#idea #stock #analytics
Li Auto: a rising star in the electric car market

LI focuses on an electric car additionally equipped with a small gasoline engine (EREV), which is used to recharge the battery when needed. This makes it possible not to get stuck on the freeway with a dead battery and increases the range to 1,080 km.

Given the as yet underdeveloped infrastructure for electric vehicles outside of major cities, the EREV, which combines the best of both automotive worlds, is the best option for the "people's car".

The numbers speak for themselves about the success of this concept. Li Auto began selling its Li One (https://www.lixiang.com/) 6-seat luxury smart SUV in late 2019, and since then its sales have grown exponentially. For example, in April alone, sales rose 111.3% y/y to 5,539 units.

Incredible sales growth and production scaling have boosted gross margins to 16.9%, up from 8.4% a year earlier. That said, the company said the pace of its production and sales has slowed the chip shortage. And that won't last forever...

The Li One has a flat retail price of 338,000 yuan ($52,95 thousand), which, combined with its roomy size, premium level, and electronics equipment, - makes the model incredibly popular.

The CEO said the company plans to ramp up production to 10,000 vehicles as early as September this year. In addition to the Li One, the company is looking to expand its product line by developing new cars.

There is no sense to look at the fundamental indicators: the main drivers of the company's growth are the dynamics of sales and margins. So far, LI is doing just fine with them.

Given a revenue forecast of $2.91 billion in 2021, which implies 101% growth, Li Auto is trading at a forward P/S of 6.2x (a measure of how much an investor pays per unit of revenue).

The consensus forecast of Wall Street analysts for Li Auto securities is $37.83, which from the current $23.65 suggests a 60% upside.
Of the 15 analysts, 13 recommend buying Li Auto stock and 2 recommend holding. Open / Comment

2021-05-28 17:00:30 ​​#statistics
Amazon's Biggest Acquisitions

This is Bezos' second-largest acquisition: Amazon (#AMZN) bought movie production company Metro-Goldwyn-Mayer (#MGM) for about $8.5b, paying far more than industry experts believe the legendary company is worth today. Only the takeover of organic supermarket chain Whole Foods in 2017 cost Amazon more, about $13.7b.

Nevertheless, the investment in MGM could pay off for Amazon . The well-known film studio not only offers the opportunity to make new films, but also owns the rights to more than 4,000 existing films. The portfolio includes the James Bond and Rocky Balboa franchises as well as the critically acclaimed series "The Handmaid's Tale." Thus, the acquisition will significantly expand Amazon Prime Video's streaming service in both quantity and quality, further exacerbating the already serious competition between streaming services. Open / Comment

2021-05-28 16:00:33 ​​#analytics
Analysis of the rail transport sector

Do you have shares of railroad companies in your portfolio? If not, you should add them, because companies in this industry are known not only for their high-quality assets but also for their reliable dividends.

Let's take a closer look at what the railroad industry has to offer.
Typically, railroad companies are characterized by increasing profits mainly through mergers and acquisitions with other companies. This is what makes railroads different from others and makes them so interesting to invest in.

The downside is that the stock quotes are highly dependent on the demand for the company's services.

We can see tremendous competition to buy Kansas City Southern. It received many offers from private equity firms last year before agreeing in March to a deal with Canadian National Railway Co, which offered 20-50% more than other competitors.

The price per share was $325 and the railroad was valued at $33.7 billion, including the assumption of debt. The company is now awaiting approval from the Surface Transportation Board.

What caused such a stir?

Along with Kansas City Southern, Canadian National, as the only major carrier in Mexico, is looking at the prospect of creating a seamless north-south railroad that could effectively compete with trucks.

Kansas City Southern is likely to be the latest viable takeover target among major North American railroads.

There are now only seven Class 1 railroads in North America. Eight if you count Amtrak. If Kansas City Southern is acquired, their number would go back to seven.

Low competition is a good thing, as cash flows become more predictable and stable. And mergers can be seen as positive signals for the companies involved and perhaps for the industry as a whole.

Railroad companies are also worth a closer look because Joe Biden plans to launch a second great railroad revolution. U.S. railroads can look forward to increased investment and efficiency under a sitting president's administration. Open / Comment