Coverage of the shares of this electric vehicle maker were just initiated at Morgan Stanley with an ‘Overweight’ rating.
Fisker Inc. (FSR)
From Cabot Global Explorer
While Tesla has about an 80% market share of U.S. electric vehicles sales, competitors are coming alive, from giants like Ford to smaller, more niche players that are now being largely overlooked by the market.
One such company is Fisker, a company headed up by luxury auto veteran Henrik Fisker and based in swanky Manhattan Beach, California. Fisker is merging into a SPAC (Special Purpose Acquisition Company) brought public by FS KKR Capital. Its first car is the Ocean, a mid-priced SUV with modern, upscale styling and flair, and full of recycled materials and the latest gadgets. The Ocean offers 2WD and 4WD option, a 250- to 350-plus-mile range, and recycled material interior. The SUV is also decked out with a large, curved screen and unique ‘California Mode’ that opens nine glass panels with one touch, and a PV solar roof to enhance efficiency. A production-intent prototype is slated for a summer 2021 unveiling.
I like this company and stock for five reasons.
First is its price point, starting at $37,500, which seems to me to be a sweet spot for a midsized five-person EV SUV. Second, Fisker has logged over 10,550 reservations for the Ocean and has $1 billion in the bank to fund its launch in the second half of 2022 with an estimated volume in 2025 of 250,000 units. Third, I like its Apple-like model of outsourcing the production of the EV to Magna much like Apple lets Foxconn assemble the iPhone while keeping 38% profit margins. Fourth, the company is going completely digital from sales to servicing, which will translate into lower costs.
Finally, unlike many other EV-related SPACs, FSR shares have not yet moved significantly beyond the SPAC IPO price.
BUY A HALF POSITION
Carl Delfeld, Cabot Global Stocks Explorer, cabotwealth.com, 978-745-5532, February 4, 2021