Daily 10X subscribers nab their first 1,000% return … why it could be just the beginning … what’s driving future growth for this high-flier
1,000% gains since May 27.
Technically, it’s an 1,119% gain.
Pretty impressive for less than six months.
So, what’s going on here?
I’m talking about what Luke Lango’s Daily 10X Report subscribers are toasting with NIO, the “Tesla of China.”
A huge congratulations on the first official 1,000% returning stock of The Daily 10X.
***Fulfilling the mission of The Daily 10X Report
For newer Digest readers, The Daily 10X Stock Report was created back in the spring for one sole purpose:
Deliver to your inbox — every day the market is open — a top-notch small-cap stock pick that could rise by 1,000% or more in the long run.
We profiled how the service has been living up to this goal last Thursday. Here was that scorecard, which is still the most updated one:
We can now add one more column — “1,000% or more.”
Again, congrats to all the Daily 10X subscribers. But let’s now return to the case for NIO.
You see, that’s the thing about explosive small-cap stocks that ride huge megatrends — even after a 10X gain, there can still be tremendous upside.
When you think about it, all the tech darlings of today came from humble beginnings.
Small companies, fighting and clawing to transform their respective industries … gaining market share bit by bit … success leading to more success, producing life-changing wealth for early investors who rode the transformation from small-cap to mega-cap.
Our CEO, Brian Hunt, recently profiled the growth of some of today’s best-known tech stocks and their returns for early investors:
In 1986, software leader Microsoft went public. Shares are up more than 150,000% since then … turning every $10,000 invested into $15 million.
That same year, software leader Oracle went public. Shares are up more than 93,000% since then. Oracle founder Larry Ellison is one of the world’s richest people, worth over $69 billion.
Have you ever opened a PDF?
The software program company behind the PDF, Adobe Systems, has watched its stock price soar more than 140,000% since its founding.
So, cheers to Luke and his subscribers for a 1,000% winner, but why stop here?
***The case for investing alongside megatrends
As highlighted above, NIO is riding the momentum of an enormous megatrend. The great thing about this style of investing is that megatrends do most of the heavy lifting for investors.
Here’s Luke describing how it works:
What’s the key to unlocking 1,000%-plus returns in the stock market?
Invest alongside megatrends.
What exactly does that mean? It’s not too complex. The process is simple:
1. Identify economic megatrends, or trends that are going to dramatically change economic behavior.
2. Find winning companies aligned with those megatrends.
3. Buy stock in those companies.
It’s that simple.
With NIO, the megatrend that Luke identified is the global move toward electric vehicles.
The days of the gas-guzzler are behind us. While consumer preference will drive much of this change, there will also be a second tailwind ensuring growth — legislation.
As we’ve noted here in the Digest, last month, California Governor Gavin Newsom signed an order that will phase out the sale of all gasoline-powered vehicles in his state by 2035. It’s a bid to reduce greenhouse gas emissions by encouraging drivers to switch to electric cars.
If California were a sovereign country, it would boast the fifth largest economy in the world. And that economy is going to be done with gasoline-powered cars in 15 years.
You can expect other states to follow suit as this decade rolls on.
This is nothing short of a massive tailwind for electric vehicles.
Here’s Luke with more on the scope of this opportunity:
Arguably the biggest megatrend over the next decade will be the widespread adoption of electric vehicles (EVs).
We are already seeing the early stages of this megatrend unfold. From 2013 to 2019, global EV volume rose more than 2,000%, and early EV leader Tesla saw its stock price rise 2,400% …
But this is just the beginning of the EV megatrend … the best is yet to happen …
EVs account for just 3.5% of total car sales today. Thanks to falling costs, improving battery technology, escalating geopolitical pressure, and increasing consumer interest, that 3.5% number will rise to 20%, 30% and higher over time … implying enormous growth potential in the EV industry over the next decade.
Now, we tend to focus on the growth of this market here in the U.S. But keep in mind, this is a global megatrend.
Here’s Luke with more on the Chinese market:
China has the biggest auto market in the world, accounting for about one out of every three cars sold globally.
Not surprisingly, China also has the biggest EV market in the world, accounting for one out of every two EVs sold globally.
Yet, EVs still represent just 5.5% of total car sales in China.
The country itself is targeting an EV penetration rate of 25% by 2025. That would equate to at least six million EVs in 2025 … up more than 400% from today.
As you can see, this is a massive trend … and we’re still in the early stages.
***Why NIO was Luke’s pick for this megatrend
So, we have one of the biggest trends of the decade …
Per Luke’s formula, we now need to find the winning companies aligned with the megatrend.
Why NIO? And what’s behind the comparison to Tesla?
Back to Luke:
Many consider NIO to be the “Tesla of China.” That’s an accurate representation. For all intents and purposes, NIO is today exactly where Tesla was back in late 2015.
Back in late 2015, Tesla had two premium electric vehicles, the Model S and X, with plans to launch a third, the Model 3, in the near future.
Today, NIO has two premium electric vehicles, the ES6 and ES8, with plans to launch a third, the EC6, in the near future.
Back in late 2015, Tesla’s Model S and X were the best-selling premium electric vehicles in the U.S.
Today, NIO’s cars are the best-selling premium electric cars in China, with the ES6 consistently registering as the top-selling electric SUV in China.
Back in late 2015, Tesla was developing an aura of exclusivity around its car owners which made the cars cool.
Today, NIO is leveraging things like clubhouses to develop a similar aura of exclusivity and coolness.
Back in late 2015, Tesla was testing autonomous driving and ramping delivery volume very quickly, but also running huge losses on scant profit margins.
Today, NIO has a big autonomous driving partnership with Intel’s Mobileye unit, and deliveries rose over 80% in 2019 (while net losses were wide and gross margins were negative).
The similarities are too great to ignore …
Back in May when Luke profiled NIO, he suggested the stock could hit $50 by 2025.
Well, not even six months after that piece, NIO is trading at $47.16 as I write.
But remember, there’s no “end date” to the electric vehicle megatrend. A $50 price-target doesn’t represent the finish line. Nor does the arbitrary date of 2025.
There’s simply a society-changing megatrend, a premier company riding that megatrend, and plenty of room to run which could make NIO’s current 1,119% return seem downright modest.
As we wrap up, a final congrats to all the Daily 10X subscribers. If you’d like to learn more about the other megatrends and premier small-caps that Luke is finding for his subscribers, click here.
In any case, keep your eyes on NIO and the electric car megatrend. This one is just getting started.
Have a good evening,