There are plenty of electric vehicle companies that investors can set their sights on nowadays. For something a little bit less direct, however, you might consider Switchback Energy Acquisition (NYSE:SBE). Granted, SBE stock isn’t the most obvious or typical way to wager on the electric vehicle revolution, but that’s not a bad thing at all.
With Switchback Energy, you don’t have to bet on any particular horse the horse race that the electric car market has become in 2020. Rather, you can bet on a “picks and shovels” type of company.
In other words, you can own a stake in a company that provides something that the electric vehicle market will need generally. Plus, there’s only a small number of publicly tradable companies that offer this service at the moment.
So, if you’re ready to dive into a special purpose acquisition company (SPAC) that’s merging with a future-facing “picks and shovels” power player in the electric vehicle domain, read on for the lowdown on SBE stock.
SBE Stock at a Glance
You might have heard the old saying that “the trend is your friend.” In the case of SBE stock, the trend is clearly to the upside. Plus, there are no signs of the stock’s momentum slowing down.
Interestingly, SBE stock wasn’t always a fast mover. Keep in mind that investors didn’t know very much about Switchback Energy earlier this year. Consequently, SBE was stuck near $10 for the majority of 2020.
However, SBE stock got un-stuck in mid-September. That’s when the bulls finally showed some signs of life and pushed the SBE share price to the $15 level.
Selling one’s shares for a 50% profit might have seemed like a good idea at the time, but the best was yet to come. Actually, I should clarify that statement. For the SBE stock bears and short sellers, the worst was yet to come.
What happened next probably triggered some margin calls. SBE held steady at approximately $14 at the beginning of November. Then it rocketed upwards, landing at $36.88 on Nov. 24. Suffice it to say, then, that the bulls are charging and it’s not advisable to stand in their path.
So, why are so many traders now drawn to SBE stock? The reason for it jolting higher is tied to the fact that the SPAC, Switchback Energy, has merged with ChargePoint.
At some point, the combined company will be called ChargePoint Holding and it is expected to be listed on the New York Stock Exchange. For the time being, though, traders can still indirectly invest in ChargePoint through SBE stock.
ChargePoint is a red-hot company because it maintains an electric vehicle charging network. Again, the appeal of this “picks and shovels” play is evident as electric vehicles will generally need to be charged on a regular basis.
Based in Campbell, California, ChargePoint is “ready to go public,” according to Darryll Harrison Jr., the company’s senior director of global communications.
Hence, the timing is right for the right for the reverse merger and ChargePoint is already positioning itself as a niche market leader. Calling it a “well-established company with a 13-year history of success,” Harrison reported that ChargePoint has 4,000 customers and a 73% market share.
As we might expect, Switchback CEO Scott McNeill is a firm believer in ChargePoint’s potential. By 2030, McNeill expects investments in charging infrastructure to reach $190 billion.
And if you need more convincing data, check this out. ChargePoint expects its revenues to sustain a compound annual growth rate (CAGR) of 60% between 2021 and 2026. You won’t see numbers like that with too many companies in any industry.
SBE stock might be considered an indirect way to get into electric vehicle investments.
Nonetheless, you can ride a fast-moving vehicle with SBE stock. The price action of SBE is undeniably bullish. Besides, ChargePoint’s market share indicates that you’d be charging up your portfolio with a niche industry leader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.