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Nio’s New Production Disruption; Popcorn, Hogs & Coke’s BodyArmor

Nio’s New Production Disruption; Popcorn, Hogs & Coke’s BodyArmor

Nio Undertaker Tesla dominating China's EV market meme big

Nio’s Red Pill Barchetta

My uncle has a charging place no one knows about. He says it used to be a farm before the EV boom.

Now, on Sundays, I elude the eyes and hop the bullet train … to far outside the city where my Nio ES6 waits.

I know, Great Ones … Nio (NYSE: NIO) isn’t exactly a “Red Barchetta.” China’s leading electric vehicle (EV) maker isn’t churning out mechanical music or hot metal and oil.

What I'd miss keep Greatness flowing meme

Heck, Nio might not even be China’s leading EV maker after the company’s most recent deliveries update. It certainly isn’t growing like a leader right now. According to Nio, it only delivered 3,667 vehicles in October. That’s down a whopping 65% from September.

Meanwhile, competitor Xpeng (NYSE: XPEV) delivered more than 10,000 EVs last month, while Li Auto (Nasdaq: LI) dropped 7,649 EVs in October.

What’s more, Li Auto was the only Chinese EV maker to deliver more cars in October than September.

So, why the big drop for Nio?

It’s not as bad as you might think. Sure, the company said that supply chain “volatility” was a factor, including the ongoing semiconductor crunch. That’s nothing new, and Nio’s competitors are dealing with similar issues.

The real reason Nio’s October numbers were so low is that the company is restructuring and retooling so it can churn out new products and enter new markets. Here’s the statement straight from the horse’s mouth:

[Deliveries were] significantly impacted by reduction in production volume as a result of the restructuring and upgrades of manufacturing lines and the preparation of new products.

In laymen’s terms, Nio is gearing up for new EVs with big plans to enter the European market.

You see, this is the kind of “excuse” I don’t mind. It shows that Nio is actively expanding and growing its business. Production downtime can be a good thing, if you’re using it to retool for better products and increased production.

It’s a problem that Nio’s competitors will face eventually. In fact, I’d argue that size is the only reason Li Auto saw deliveries rise from September to October. Li hasn’t grown as large as either Nio or Xpeng, so it has more room to grow before it encounters similar production problems.

It appears that Wall Street came to the same conclusion on Nio. While NIO stock was down in premarket trading, those losses quickly evaporated — especially after Nio said it saw all-time high orders in October due to “increasing user demand.”

NIO shares went on to finish Monday on a positive note, as investors anticipate more gains once retooling and restructuring are complete.

Now, for all those Great Stuff Picks readers out there … remember, we bought NIO stock back on September 13. Click here to see my full write-up.

The shares went through a rough patch last month, but that’s all behind us now, I think, and NIO is finally starting to head higher.

In other words, if you didn’t buy NIO stock back in September — or throughout the dip in October — your time is running out to get in early on Nio’s rally. A better vanished time … if you will.

And finally, if you were one of the lucky Great Ones to get in on The Final Run Up, you already know that NIO is trading in the “green” right now … making it a good time to buy in.

Don’t know what I’m talking about? Fire up those willing engines and click here to find out more!

Great Stuff Good Better Best

Good: Let’s All Go To The Movies!

AMC Shrek what are you Dune swamp meme

Have y’all seen Dune yet? I’m not talking about the 1984 version with Kyle MacLachlan as the Kwisatz Haderach and Sting. That one was pretty good, but honestly, it feels very dated.

No, I’m talking about the new Dune movie. It’s nothing short of a work of art. It’s Stanley Kubrick’s 2001 kinda pretty — not 2010, mind you, though that came out the same year as the original Dune movie.

Anywho, the point is that you want to see the new Dune movie on as big a screen as you can. And given AMC Entertainment’s (NYSE: AMC) update on October ticket admission revenues, many people did exactly that … and not just for Dune.

According to AMC, last month’s ticket admission sales were the highest they’ve been since February 2020 — when the pandemic prompted movie theaters across the country to close:

AMC confirmed today that its October 2021 ticket admission revenues at AMC’s movie theatre circuit in the U.S. also were the highest AMC has seen for any single month since February of 2020.

Similarly, October 2021 ticket admission revenues at AMC’s international theatre locations also were the highest of any month since the pandemic caused the shutting of theatres back in 2020.

Can you feel it, Great Ones? Popcorn is popping. Fountain drinks are fountaining. Licorice whips are whipping. M&M’s are mmmm-ing again! Nature is healing!

Now if only AMC wasn’t a meme stock, I’d be a lot more jazzed about this news.

Better: It’s Got What Traders Crave — It’s Got Electrolytes

Bodyarmor KO buyout Gatorade meme

If you’re looking for non-earnings-related news this week, Coca-Cola (NYSE: KO) can satisfy your carbonated cravings. This morning, the food and beverage behemoth announced its plan to fully acquire sports drink brand BodyArmor for $5.6 billion after taking a 15% stake in the company three years ago.

Why has the Coke connoisseur set its sparkling sights on BodyArmor?

Well, for one, the sports drink company is growing at roughly 50% per year and is on track to “drive more than $1.4 billion in retail sales.” BodyArmor also has built-in brand recognition within the sports community, as several of its founders and investors are professional athletes — including the late Kobe Bryant, whose estate currently owns 5% of the company.

Most importantly, BodyArmor is the only real competitor to PepsiCo’s (Nasdaq: PEP) Gatorade — which is the No. 1 sports drink on the market.

We all know that Coca-Cola and Pepsi are locked in an eternal battle for our soft-drink-addicted souls. But while Coke has captured roughly 45% of the carbonated soft drink market, it’s Pepsi that currently dominates the $10 billion sports drink industry.

Even after BodyArmor’s acquisition is finalized, Coca-Cola’s 23% claim over the sports drink market won’t hold a candle to the 74% stake that Pepsi owns. But it’s certainly a step in the right direction for KO.

Let’s be honest: If anyone is going to knock Pepsi off its pedestal, it’ll be rival caffeine fiend Coca-Cola. Besides, I hear that BodyArmor has what traders crave — it’s got electrolytes, after all. (Any Idiocracy fans out there? No? Just me?)

Best: Harley Goes HOG-Wild

HOG Harley investors hearing tariffs lifted meme

What’s happier than a pig in mud? A Harley-Davidson (NYSE: HOG) investor who saw their shares soar 9% higher in premarket trading this morning after the U.S. and the European Union finally settled their tariff turf war.

In case you didn’t know, back in 2018, the Trump administration imposed a 25% tariff on European steel and another 10% tariff on aluminum. Unsurprisingly, that didn’t sit too well with the EU, which retaliated and imposed taxes on U.S. exports like peanut butter, orange juice and bourbon. (Not the bourbon! Oh, the humanity!)

Both sides have bickered back and forth for years over the mounting costs of goods and materials, with companies like poor Harley-Davidson caught in the middle of this transatlantic tiff.

In fact, Harley-Davidson faced European tariffs of 56% if the dispute wasn’t resolved … so you can imagine how relieved the motorcycle maker must feel now that the levies are being lifted:

 [This] is a big win for Harley-Davidson and our customers, employees and dealers in Europe. We are excited that this brings an end to a conflict that was not of our making and in which Harley-Davidson had no place. — CEO Jochen Zeitz

To offset rising costs and ongoing supply chain issues, Harley-Davidson recently had to raise the prices of its bikes just to stay afloat. But today’s announcement should relieve some of the pressure the bikemaker’s been under and may even entice new motorcycle enthusiasts to say: “Screw it, let’s ride.”

While I don’t recommend that you go chasing waterfalls or HOG’s short-term rally this morning, the tariff resolution does put the company back on the investing map once again … but only after the dust settles.

Great Stuff Chart of the Week

Big Tech might’ve already had its biggest earnings week, but the real feast of earnings season has yet to begin. Just take a look at this week’s action-packed slate from Earnings Whispers on Twitter:

Earnings season November 1 week of chart

Y’all see what I see? The stock of honor … my shining star … OK, even I won’t go that far about Roku (Nasdaq: ROKU). You can catch up here on just why we’re obsessed with the platform-agnostic streamer … or you can tune in to the company’s report this week to see for yourself.

By now, everyone’s already keyed in on Roku’s ever-impressive earnings growth — so much so that even a cable stalwart like Comcast eyed Roku as a potential buyout this past summer. Better yet, ad revenue is just gaining momentum, so keep an eye and that figure when Roku reports this Wednesday.

While we’re picking personal favorites from the Great Stuff team, DraftKings (Nasdaq: DKNG) always gets a lot of love within these virtual pages — and doubly so during earnings season.

DraftKings has done a bang-up job at dominating the online sports betting market … but it’s definitely come at a high advertising cost that might start concerning some DKNG investors. (Even in earnings season, we simply cannot escape the advertisers’ onslaught.)

Now, as much as I love Corsair’s (Nasdaq: CRSR) computer accessories and peripheral products … jeez, does Corsair know how to let CRSR investors’ hopes down. This week’s report might be no different; I’m not holding my breath.

Maybe now that the company doesn’t even expect to meet its own estimates going into earnings, investors’ lowered expectations might work in CRSR’s favors … right?

Other than our faves, name your favorite upstart startups and other assorted “innovators” … and it’s probably reporting earnings this week. Enter all the Ubers and Airbnbs and Pinterests of the market. Oh joy.

Now, Coinbase (Nasdaq: COIN) is still relatively new to the earnings confessional, but so far, so great! (Take note, Robinhood.) Last quarter was one of crypto’s craziest, and just like we told you last week: “The more acceptance cryptocurrencies gain, the bigger this company is going to get.”

And then, there are a few certain somebodies who made bank early in the pandemic but turned sour in recent reports — that’d be you two, Etsy (Nasdaq: ETSY) and Zillow (Nasdaq: ZG).

Zillow, for one, used to razzle and dazzle the analyst crowd with its homebuying hustle. But its house flipping is now flopping since Zillow doesn’t even have enough agents to sell the houses it preemptively bought.

Considering OpenDoor (Nasdaq: OPEN) has no problem with its respective homebuying business — despite buying twice as many homes — Zillow has a virtually unreachable bar going into its report this week.

Now throw in a handful of telecom dinosaurs and Big Pharma vax makers, and you have one brimming pot of fresh earnings stew! Tell me in the inbox: What report are you looking forward to most this week … and why is it Roku?

We’d love to hear from you, so don’t forget to write in. In the meantime, here’s where else you can find us:

Until next time, stay Great!

Joseph Hargett

Editor, Great Stuff

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