The global shift towards sustainability is fueling the rise of electric vehicles (EVs). This trend continues to boost EV stocks, creating attractive investment opportunities. Yet, not all EV stocks carry a high price tag. In fact, some cheap EV stocks offer substantial growth potential.
In this article, we spotlight three such stocks. These lesser-known EV companies may not share the limelight with giants like Tesla (NASDAQ:TSLA) or Nio (NYSE:NIO), but they’re making significant strides in the market. Currently undervalued, these cheap EV stocks present a unique opportunity for savvy investors.
So let’s uncover which companies should be on your watchlist.
BorgWarner (BWA)
BorgWarner (NYSE:BWA) is a global product leader in clean and efficient technology solutions for combustion, hybrid, and electric vehicles. It’s also one of those cheap EV stocks that you can scoop up shares for only $36 at the time of writing. BWA’s ace in the hole is its ability to commercialize new technologies well. One edge it has over its peers is its eTurbo technology, which increases the power density of its solutions while also reducing emissions. It’s one of the cleaner options on the market, which will continue to rise in importance as we transition more towards EVs.
As an inexpensive EV stock to buy, it also trades well below its analyst price target of $52.83. It may soon reach this level, as it’s currently in a strong trend. BWA stock trades above its 200-day SMA.
The company also has solid fundamentals which makes it a good momentum pick. Its EPS grew 77% this year and analysts predict that next year will also be good for the company. This combination of factors shows that it’s one investors should buy, or at least keep on their watchlists.
Sensata Technologies (ST)
Sensata Technologies (NYSE:ST) is a leading designer and manufacturer of sensors, selling into the transportation and industrial verticals. It supplies the needed parts and components needed for the EV industry to thrive, and it may also rise in value due to the concurrent tailwind.
Specifically, the firm sells tire pressure monitoring systems (TPMS) and a plethora of other pressure, temperature, and position sensors in the automotive and heavy vehicle end markets. Its share can also be bought cheaply with a $42 price tag and a $52.58 analyst price target.
Buying ST stock could fill a hole in your portfolio if you’re after EV exposure along with an overlay to the industrials sector. It recently beat analyst EPS forecasts by 4 cents. Notably, its return on equity (ROE) is high at 17.67%. This proves company efficiency in conversion of shareholder capital to profits, an unusual feat for a relatively small company of $6.42 billion, one undergoing explosive growth.
The company is also cheap on a forward P/E basis, which stands at just 10. Its current P/E is 16.71, which suggests strongly bullish expectations on behalf of the market.
Aptiv (APTV)
Aptiv (NYSE:APTV) is an automotive technology supplier whose share has fallen sharply this year. To simply APTV’s strengths, it has highly integrated engineering relationships with automakers along with a keen ability to commercialize new technologies in its realm of expertise.
Despite shedding its value in June, it’s up an appreciable 17.57% year to date. But it’s also down around 1% for the latter part of the year. Analysts again rate APTV as a value stock with growth characteristics. Its price target is $127.36 and trades at $106.91 at the time of writing.
APTV’s volatility can more or less be chalked up to the uncertainty we had coming into this financial year and the full return to risky equities near the middle of it. A rising tide lifts all boats, and a falling tide grounds all ships. APTV also beat analyst estimates by 2.3% in its Q1 results.
This may not sound that impressive, but in real terms, its bottom line increased 44.4% year over year. The top line increased 15.3% year over year. It also registered 24% growth in Europe, 14% in North America, 7% in Asia, including 2% in China, and 11% in South America.
APTV is definitely a stock to buy before it rises in value much further.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
