This company should capture the attention of anyone seeking something off the beaten path. CIIG Merger (NASDAQ:CIIC) is a shell company that’s merging with Arrival, a U.K.-based manufacturer of all-electric vehicles, including buses for mass transit. If that sounds intriguing already, CIIC stock might just be right up your alley.
If you’re thinking that there are already plenty of electric vehicle (EV) special purpose acquisition company (SPAC) stocks on the menu, I understand where you’re coming from.
Even in a crowded field, though, you can still find some hidden gems. Not every EV maker is competing in the same exact niche and Arrival isn’t really trying to compete directly with the more notable EV names.
Plus, Arrival’s cost-efficient delivery vans actually stand apart from the other EVs you’ve probably seen. We’ll delve into the finer points of that soon, but let’s begin with a glance at the price history of CIIC stock.
A Closer Look at CIIC Stock
CIIC stock presents a textbook example of how patience can really pay off in the capital markets.
For almost the entirety of 2020, CIIC stayed close to the $10 level. You’ll sometimes see this happen with pre-deal-announcement SPAC stocks because investors are still waiting to find out which company will be the merger target.
Anyone who held onto their CIIC shares through November and December, though, is probably happy with that decision today. The stock price started climbing in mid-November and hit a 52-week high of $37.18 on Dec. 7.
If that was the hype phase, then the cooling-off period came next. A steady share-price decline ensued, with the stock landing at $27.14 today, on Feb. 9.
So, now it’s just a question of whether Arrival’s arrival is worthy of a long-term investment.
Off to a Good Start
Arrival isn’t a household name yet, but it’s already staking its claim in the commercial vehicle electrification niche. The company has “over $1 billion in committed orders,” which justifies its estimate of $14.1 billion in sales by 2024.
Importantly, Arrival also already has United Parcel Service (NYSE:UPS) as a client. It’s a perfect fit because the company manufactures electric buses and vans that are ideally suited for delivering online retail packages.
In addition, Arrival has backing from institutional investors like BlackRock (NYSE:BLK) and automotive firms like Hyundai (OTCMKTS:HYMTF).
It’s also encouraging to know that, according to the company, its forecasted addressable market is approximately $430 billion. That includes $280 billion for vans as well as $154 billion for buses. If you include orders from United Parcel Service, Arrival already has signed contracts representing a total order value of roughly $1.2 billion.
So, as you can see, Arrival has been aggressively pursuing its niche market from the get-go, greatly bolstering CIIC stock.
Hungry Like the Wolfe
With that in mind, it appears that analytic firm Wolfe Research is also an eager champion of CIIC stock as an investment. Not long ago, the analysts at Wolfe assigned an “outperform” rating on the stock.
But it gets even better. Along with that rating, Wolfe served up a price target of $50 on CIIG Merger. The firm cited Arrival’s “competitively priced vehicles” when compared to conventional internal- combustion-engine-powered vehicles. Specifically, it asserted, “Starting in 2022, Arrival plans to offer electric vans that are priced at parity with internal combustion engines (ICEs).”
Thus, if price was ever a sticking point for companies hesitant to adopt electrification, Arrival is tackling that issue head-on.
I should also mention that CNBC financial commentator Jim Cramer has offered praise for Arrival as well. He even declared that the company has the “best claim” to be the son of Tesla (NASDAQ:TSLA).
Cramer further noted that the company is “revolutionizing the entire auto industry,” citing the fact that Arrival makes “all their own components” and will “be cost-competitive with gasoline and diesel.”
The Bottom Line
So, Arrival’s addressable market is enormous and the company is already positioning itself as a front-runner within it.
By specializing and keeping costs reasonable, Arrival is standing out in a seemingly crowded field. Therefore, if you’re ready for an EV investment with a difference, CIIC stock deserves a place in your portfolio.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
