China-based electric vehicle (EV) manufacturer Li Auto (NASDAQ:LI) went from loved to hated in August. The market can be fickle sometimes, but that’s where prime opportunities present themselves. So, take a close look at LI stock and decide if you’re ready to take a buy-and-hold position.

Sometimes I give EV stocks a so-so assessment. When it comes to Li Auto, however, I’m pounding the table with both hands. This is where the rubber meets the road, and if you’re bullish on the global clean-energy vehicle trend, you definitely shouldn’t sleep on Li Auto.

Why Did LI Stock Drop Like a Rock?

When a company’s quarterly results and share price diverge, it’s time to get out the bucket because it’s raining gold. I scoured Li Auto’s second-quarter 2023 results and didn’t find anything objectionable. Yet, LI stock tumbled from $46 to $40 in the days following the earnings report.

A Barron’s writer explained, “Profit-taking is one reason for the drop.” I looked for other reasons, but couldn’t find any. Still, I suppose that after the impressive year-to-date rally in the Li Auto share price, financial traders sought an opportunity to take their profits and run.

They’ll likely miss out on huge gains. First and foremost, Li Auto is a profitable business. You certainly can’t say that about every EV startup. Furthermore, Li Auto is in a solid capital position. The automaker disclosed second-quarter free cash flow of 9.62 billion RMB ($1.33 billion), up 43.6% quarter over quarter.

Li Auto’s Growth Is Indisputable

I’m just getting warmed up here, folks. Here are some more second-quarter results for Li Auto, along with the year-over-year percentage growth:

• 86,533 vehicles delivered, up 201.6%
• Vehicle sales of 27.97 billion RMB ($3.86 billion), up 229.7%
• 28.65 billion RMB ($3.95 billion) of total revenue, up 228.1%
• Net income of 2.31 billion RMB ($318.6 million), which is infinitely better than the 641 million RMB net loss from 2022’s second quarter

In the wake of those stellar results, Li Auto CEO Li Xiang has certainly earned some bragging rights. “We would strive to become the no.1 premium car brand in China in 2024 in terms of sales,” the chief executive recently declared.

I’m usually not a fan of corporate braggadocio, but as the old saying goes, you can’t argue with the numbers. Besides, I’m still stunned that LI stock fell after the earnings release. It’s baffling, but it represents a chance to get on board if you’re not already invested.

LI Stock: Be Right and Sit Tight

Sometimes, it’s difficult to find reasons for stock selloffs. I tend to concur that financial traders dumped their Li Auto shares because they were eager to take profits.

I expect those traders to regret their hasty decision. Li Auto is delivering plenty of EVs and remains profitable. Therefore, I encourage investors to be on the right side of the trade and buy LI stock or add to their current share positions today.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.