Its among the worlds notable electric vehicle companies. Conventional wisdom says that a PEG ratio of 1 or less is considered good (at par or undervalued to its growth rate). No recommendation or advice is being given as to whether any investment is suitable for a particular investor. cross between the bipolar and MOSFET transistors, 13 million miles of zero-emission operations. In addition, foreign investors could purchase BYD's shares only on the Hong Kong Stock Exchange or on the OTC market, where sometimes there might be not enough liquidity or big spreads, which is a downside as well. This time period essentially shows you how the consensus estimate has changed from the time of their last earnings report. Partnerships have been formed with Norwegian importers, and BYD plans to expand to other Western European markets as NEV market share continues to rise. And like the P/E ratio, a lower number is typically considered 'better' than a higher number. Add in BYD's promising commercial EV business and its growing battery manufacturing business, and BYD could be valued at several hundred billion dollars. Byddf stocks are those that are held by the government, while byddy stocks are those that are held by the private sector. It is the most commonly used metric for determining a company's value relative to its earnings. Electric vehicles are here to stay; no longer is that disputed. The main difference between byddf and byddy stocks is that byddf stocks are considered to be more reliable. BYD (OTCPK:BYDDF, OTCPK:BYDDY) released its third quarter earnings, where net income was up 781% Y/Y and EPS up 3,000% Y/Y. Its all the same company. BYD reminds me way more of a chinese Tesla than NIO because BYD also has other fields they do things in . In 2002, Berkshire Hathaway acquired a majority stake in Tellabs, a defense communications company. The VGM Score are a complementary set of indicators to use alongside the Zacks Rank. Besides electric cars, BYDs other products include electric bikes, rechargeable batteries, and solar panels. While currently, BYD has a market cap of ~$100 billion, its forward P/E of ~130x is lower than to P/E's of other growing companies that don't grow at a triple-digit rate, as was the case in Q1. For example, a stock trading at $35 with earnings of $3 would have an earnings yield of 0.0857 or 8.57%. Investors looking for more recent stock market news will want to keep reading! On top of that, using EV technology instead of diesel-powered vehicles will lead to lower local emissions and can thus translate to cleaner air. In this report, we will shine some light on this lesser-known EV play and outline why Buffett has chosen BYD over the likes of Tesla (TSLA), NIO (NIO), and other better-known EV companies. First, BYDDF and BYDDY are versions of BYD stock. The ever popular one-page Snapshot reports are generated for virtually every single Zacks Ranked stock. I am told BYD will make things easier/clearer when it spins off its battery unit and IGBT semiconductor unit, though if they only list on STAR, HK, SZ, Shanghai, and not in U.S./OTC (which is the new retaliatory trend for Chinese companies), it will be difficult for many U.S. investors to own the spin-offs. Also, by looking at the rate of this item, rather than the actual dollar value, it makes for easier comparisons across the industry and peers. In addition, BYD is also cheaper than its peers such as NIO, Tesla, XPeng, and Li Auto, which are trading at 10 to 20 times their sales, as its P/S ratio is less than 4x. If a company's expenses are growing faster than their sales, this will reduce their margins. Less than 1 means its liabilities exceed its short-term assets (cash, inventory, receivables, etc.). Tesla, with annual deliveries of about 800,000 vehicles, is valued at roughly $700 billion, or about $900,000 per car they sell. It saw an opportunity in electric cars amid the push to curb climate change and jumped on it. The other. A stock with a P/E ratio of 20, for example, is said to be trading at 20 times its annual earnings. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. Nevertheless, for value investors and valuation-conscious stock pickers, it seems like one of the best choices in the EV space. Joe Biden has since been elected President, which could benefit. Learn more about Zacks Equity Research reports. What causes stock price to differ from the real time data? To learn more, see our tips on writing great answers. BYD brought Han to Stuttgart, the home of Porsche and Daimler, and had very positive feedback from the public on the cars design and specs. BYDDF trades at HKD:USD conversion rate (0.13) of the HK shares, so that makes financial breakdowns in USD easier, and BYDDY trades at 2x BYDDF. BYD's major advantage is that it's already one of the most dominant companies in the EV industry in China, which is also the biggest EV market in the world. All rights reserved. BYDDF and BYDDY are both OTC, but BYDDY is the ADR (source - the article mentioned above) Sooo whatever that means haha. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Most importantly, though, was the outline of Chinas ambitious Five-Year Plan released last week, in which domestic production of NEVs and technology is central to Chinas economic plans over the next five and 15 years. The portfolio's price can fluctuate, but the income stream remains consistent. Tesla delivered 184,800 EVs globally in Q1 2021. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%. People tend to use electric vehicles to mean electric cars, which they certainly are, but passenger vehicles are only a portion of electric vehicles. It is certainly possible the U.S. will call on BYD for more than just electric buses in the future. Only BYD has the ability to produce beyond passenger electric vehicles, and also the batteries to do so. Others look for those that have lagged the market, believing those are the ones ripe for the biggest increases to come. I have no business relationship with any company whose stock is mentioned in this article. Commercial vehicles are easier for governments to implement, and offset significantly more carbon than passenger vehicles, since they tend to be larger and are driving more than passenger vehicles, such as taxis, buses, garbage trucks, etc. What's the difference between Byddf and Byddy? This was likely driven by a combination of ultra-loose monetary policy, growing adoption of EVs, and the fact that there was a large wave of new investors joining the market, many of them young and interested in potentially "disruptive" technologies. Investors who discover that Buffett has a significant stake in BYD stock often wonder whether the company pays a dividend. For that reason, sometimes it might be hard for investors outside of China to find fresh financial information on the company, as its English IR section on the official website is not updated as frequently as the Chinese IR section. Find out the difference between two stocks of the same company (how to identify ADRs, etc) 0. That is a 33% cost reduction from battery and IGBT costs alone for BYD compared to the best-selling EV model in the world. I am not receiving compensation for it (other than from Seeking Alpha). Both tickers are for same company BYD, a Chinese EV company, known for being invested in by Warren Buffett. The Price to Book ratio or P/B is calculated as market capitalization divided by its book value. The company operates in the automotive business through its subsidiary, BYD Auto. BYD is the only company that makes EVs of all classes. Real time prices by BATS. For example, a regional bank would be classified in the Finance Sector. Why does Rolls Royce have 4 separate tickers, on OTC Markets? This is a longer-term price change metric. CEO at Snow Bull Capital, a hedge fund focused on high tech, new tech, clean tech, and green tech companies that lead their respective industries in terms of technological innovation, and whose technology has a meaningful and positive impact on the world. Since BYDDF is traded on the OTC markets, not many analysts cover the stock. BYD is, however, a larger and more successful company than these widely followed EV companies. With a 150% growth rate in EV deliveries, BYD grew significantly faster than Tesla, which saw its volumes rise by a little above 100% year over year. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Furthermore you will learn about the. A positive change in the cash flow is desired and shows that more 'cash' is coming in than 'cash' going out. BYD North America supplies buses to over 50 customers in the U.S. alone, with over 400 buses on U.S. streets (more than any other electric bus). BYD expects battery production capacity will reach 65 GWh by the end of this year, 75 GWh in 2021, and 100 GWh in 2022. First, BYDDF and BYDDY are versions of BYD stock. It operates through the following segments: Rechargeable Batteries and. That said, the company is a strong player in the Chinese EV market. Collectively, the two components (the battery cost at the pack level) account for 38-42% of the total manufacturing cost of an EV, by our estimates. The Price to Cash Flow ratio or P/CF is price divided by its cash flow per share. The longer-term perspective helps smooth out short-term events. BYD Company is a China-based vehicle maker that mainly focuses on manufacturing automobiles. So, as with other valuation metrics, it's a good idea to compare it to its relevant industry. One of the reasons some investors prefer the P/S ratio over other metrics like the P/E ratio is because sales are harder to manipulate on an income statement than earnings. In fact, BYD's Tang and Han models can be described as premium cars that sell for similar prices as do Tesla's offerings. Like the P/E ratio, a lower number is considered better. While our testing has found that a P/S ratio of <2 is the optimum range for returns, be sure to compare this ratio to its respective industry. What does 'They're at four. In this example, the one with the P/E of 40 is the better bargain because it is selling at a discount to its growth rate. Cash flow itself is an important item on the income statement. This is useful for obvious reasons, but can also put the current day's intraday gains into better context by knowing if the recently completed trading day was up or down. Return on Equity (or ROE) is calculated as income divided by average shareholder equity (past 12 months, including reinvested earnings). Beyond China, BYD has bus factories in Brazil, Canada, the U.S., and Europe. Lastly BYDDY is an ADR while BYDDF is H share, but who cares? Another advantage of BYD is that it ended Q1 with $2.1 billion in cash and with an interest coverage ratio of 5.5x it has more than enough resources to easily service its debt, reinvest available resources into its growth, and continue to pay dividends to its shareholders. Thats all Ill say. It is essentially the inverse of the P/E ratio. Market Realist is a registered trademark. Nevertheless, foreign investors still can invest in the company by purchasing its shares via an OTC market and benefiting from the possible appreciation of its stock, as there's every reason to believe that the sales of its electric vehicles in China will only increase in the following decade. A higher number means the company has more debt to equity, whereas a lower number means it has less debt to equity. Now that the CCPs Central Committee has given more detail in Chinas Five-Year Plan, we estimate 6.2 million NEVs sold in 2025 in China, which would meet Chinas goals of 20% of new vehicle sales being NEVs. a decent size positon. In addition, another advantage of BYD is that it's a battery producer as well and it not only manufactures batteries for its own EVs but also sells them to other OEMs as well. Including the Zacks Rank, Zacks Industry Rank, Style Scores, the Price, Consensus & Surprise chart, graphical estimate analysis and how a stocks stacks up to its peers. If you want to reach out, you can send a direct message here on Seeking Alpha, or an email to jonathandavidweber@gmail.com. The (F1) EPS Estimate Monthly Change calculates the percentage change in the consensus earnings estimate for the current year (F1) over the last 4 weeks. Chinas fast-expanding middle-class population is also an advantage for BYD, especially in the luxury car market. After last weeks article, many people commented that they didnt know which BYD tickers they should buy. BYD, of course, also sells its own passenger EVs that compete with the offerings of NIO, Tesla, etc. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style. Shareholder Equity (which is the difference between Total Assets and Total Liabilities) can be found on the Balance Sheet. BYD is a chinese company that has seen really stable and good growth this year but i havent seen anyone posting about it or commenting that he owns the stock . Copyright 2023 Market Realist. It's also commonly referred to as a 'liquidity ratio'. and our We believe purchasing BYDs stock is a good way of exposing your portfolio to the EV industry. I am not receiving compensation for it (other than from Seeking Alpha). Seeking Alpha's Disclosure: Past performance is no guarantee of future results. At this stage, BYD's major advantage is that it's already one of the most dominant companies in the EV industry in China, which is also the biggest EV market in the world. It's an integral part of the Zacks Rank and a critical part in effective stock evaluation. If BYD were to keep that rate throughout the remainder of the year, they would sell 220,000 EVs in 2021, but due to the Chinese New Year in Q1 and planned production growth, that is likely a conservative estimate, and it seems reasonable to assume that BYD will actually sell more than 220,000 EVs this year. BYD (BYDDF) Stock Forecast, Price & News $30.29 -0.65 (-2.10%) (As of 04/28/2023 ET) Compare Today's Range $29.99 $30.75 50-Day Range $25.04 $30.94 52-Week Range $21.29 $43.61 Volume 58,953 shs Average Volume 59,964 shs Market Capitalization $88.18 billion P/E Ratio 59.39 Dividend Yield N/A Price Target N/A I wrote this article myself, and it expresses my own opinions. 1. which of the two Buffett owns, 2. if it matters which one you might buy (as I said they have always moved in lock step, so it would seem if Buffett hit a home run on the one he owns, the owners of the other would do just fine too. BYD, however, trades at a discount compared to most of the better-known EV stocks, thus one may argue that they are trading at a more reasonable price: While peers such as NIO, Tesla, XPeng, and LI are trading for 10-25 times sales, BYD trades at 3.7 times its sales. I stressed the importance of BYDs Blade Battery in my Seeking Alpha article last month, but I should stress it even further. The most common way this ratio is used is to compare it to other stocks and to compare it to the 10 Year T-Bill. However, from a valuation perspective, BYD is the cheapest as compared to NIO, XPeng, as well as Li Motors. The difference is that BYDDY is the ADR of BYD stock, while BYDDF is its H-shares. Conventional wisdom also has it that if the yield on the stock market (S&P 500 for example) is lower that the yield on the 10 Yr., then stocks would be considered overvalued. The analyzed items go beyond simple trend analysis. A company like BYD comes once in a blue moon. Making statements based on opinion; back them up with references or personal experience. InvestorPlace is home to all the latest stock news traders will want to know about. Cash Flow is a measurement of a company's health. Bidens plan to catch up to China in tackling climate change is the opposite of what weve seen under President Trump. What's the difference? When comparing this ratio to different stocks in different industries, take note that some businesses are more capital intensive than others. BYD stock has soared in 2020 but there appears to be more room for the stock to keep climbing. I have since visited the HQ 14 times, toured its largest battery factory in Kengzi, Shenzhen twice, toured dozens of its other factories across China, been to its offices in Los Angeles and New York City multiple times, and toured the Lancaster, CA bus factory. The 4 week price change is a good reference point for the individual stock and how it's performed in relation to its peers. I have no business relationship with any company whose stock is mentioned in this article. rev2023.5.1.43405. 3. I have no business relationship with any company whose stock is mentioned in this article. We use cookies to understand how you use our site and to improve your experience. BYDDF is traded on Hong Kong Stock Exchange" Where did that quote come from? As states and municipalities become more environmentally conscious and frugal, they are starting to buy electric buses to reduce their carbon footprint. Zacks Premium - The way to access to the Zacks Rank. That includes whats happening with Phunware(NASDAQ:PHUN), EVgo(NASDAQ:EVGO), and Ensysce Biosciences(NASDAQ:ENSC) shares today. This includes measuring aspects of the Income Statement, Statement of Cash Flows, the Balance Sheet, and more. BYDDF is seeing heavier trading than normal today. Now Berkshire's stake is worth well over $5 billion and BYD is in the top 10 largest holdings of the fund to date. It currently has a Growth Score of D. Recent price changes and earnings estimate revisions indicate this would not be a good stock for momentum investors with a Momentum Score of D. The Zacks Equity Research reports, or ZER for short, are our in-house, independently produced research reports. In April, BYD reported stunning earnings results for Q1. Moreover, when comparing stocks in different industries, it can become even more important to look at the relative measures, since different stocks in different industries have different values that are considered normal.