There’s no shortage of companies in the electric-vehicle space. So, why would anyone want to go with a relative upstart like Workhorse Group (NASDAQ:WKHS) stock?
Could there really be something unique about this company, some thing sufficiently compelling to make you want to buy WKHS stock now?
The funny thing is, as soon as you think you’ve seen everything in the markets, they come up with something new. Workhorse is a perfect example, and the company isn’t just another entrant into the electric vehicle market.
An open mind will take you a long way in the investing game. Given some patience and a willingness to try something new and innovative, you might WKHS stock to be a long-term winner that you completely didn’t anticipate.
Who knows? It could end up being the workhorse of your portfolio.
A Closer Look at WKHS Stock
If you’re specifically looking for a low-beta stock, then WKHS is definitely not your cup of tea. To give you one example, on July 31 the shares closed down 5.5%, and that was a day when most of the major stock market indexes were in the green.
In other words, WKHS is a big mover, plain and simple. This thing is slippery when wet, meaning that it will slide far and fast when the market decides it doesn’t like the stock.
Going back 10 years, we can observe that the WKHS stock price moved up to $9, then all the way down to $1. Then it did both of those things again. What a roller-coaster ride!
Finally, in early July the bulls finally broke through that $9 ceiling and took WKHS to the $21 area. It retraced to $15 and change soon afterwards, but don’t even think about short-selling this stock as the bulls are firmly in control of the price action.
A Trip Into the Future
So, what exactly does Workhorse do? The company bills itself as “a technology company focused on providing drone-integrated electric vehicles to the last mile delivery sector.”
Last-mile delivery is a niche that investors sometimes ignore but really shouldn’t. Sometimes it’s that final mile that’s the most difficult because the logistics of getting to the front door can be quite challenging.
When we unpack (sorry, I’m full of puns today) Workhorse’s self-description, we see that the company is in the red-hot but highly competitive electric-vehicle market. Yet, Workhorse is a niche competitor because the company specializes in electric vans, not regular passenger cars.
Workhorse’s new van model, the all-electric C1000, is named that way because of its 1,000 cubic feet of capacity. That means the C1000 is roughly the same size as a typical United Parcel Service (NYSE:UPS) delivery van.
UPS vans aren’t mostly electric. This could change in the future, but for the time being, the Workhorse C1000 looks like the future of delivery vans while UPS appears to be stuck in the past.
Using Robots for Efficiency
Being all-electric isn’t the only difference, though. Using people to deliver packages can be expensive, costing up to $1 per a package. Instead, Workhorse CEO Steve Schrader likes the idea of using a small robot known as a Horsefly.
The Horsefly is Workhorse’s name for an autonomous four-rotor drone. With a Horsefly drone, Schrader suggests that deliveries can be more cost-effective. “It’s like another delivery man … The [drone] is 4 cents [per package],” he calculates.
It might seem like a dystopian future if robots are replacing delivery personnel. However, drone technology could provide a wide economic moat for Workhorse as the Horsefly is a unique potential addition to the already innovative C1000.
The Bottom Line on WKHS Stock
Don’t confuse Workhorse with the other electric-vehicle makers on the market. Since Workhorse is an early mover in the electric delivery van space, as well as a trailblazer in drone technology, WKHS stock could get a whole lot more expensive before the year’s through.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.
