Long-term EV investments – An alternative to Tesla
Lately, I’ve gotten a lot of emails with questions about EV companies. And, you know me – I love Tesla and I’m quite passionate about the EV market in general. So, in this blog, I’ve got yet another great electric vehicle manufacturer for you. But they’re not just any other company – they’re a business that’s been endorsed by Warren Buffet on multiple occasions!
Before we begin, I’ve got a quick favour to ask you. And, yes, I know that you’ve already heard me say this a thousand times, but, if you want to see the channel grow, please don’t forget to hit like and share the blog with your friends. Of course, if you haven’t subscribed already, go ahead and do that first (and don’t forget to click the bell button to stay up to date with my content!). Alright, now let’s talk EVs.
Today, we are taking a look at BYD (Build Your Own Dream, ticker symbol BYDDFF) – a Chinese electric vehicle manufacturer, supported by none other than Warren Buffett himself. Somehow, this company has managed to remain under the radar and most investors still haven’t jumped in on it. But we aren’t “most investors”, now are we? We aren’t going to let a fantastic opportunity pass us by. So, here’s what we’re going to look at:
- What is Buffett’s history with the company
- Who are BYD and why am I so passionate about them
- What do their stats look like? (financial breakdown and analysis)
How Much Did Warren Buffett put in BYDDF (and why?)
Buffett has been in on this stock for years – his first significant purchase of BYD stock happened in 2008. Talk about long-term vision!
At that time, Mr Buffett bought 225 million shares (at HK$8, costing HK$1.8 billion). Not only that, but he hasn’t reduced his stake ever since that initial purchase.
When we consider the difference in share prices between then and now, he’s looking at a return that’s over 18.6 times bigger than his original investment. That’s no small sum, even for an investor of his calibre.
How did he manage to achieve this? Well, if you’ve been around the channel for a while, you already know what I’m going to say – he looked at the long term. He’s a “buy-and-hold” type of guy. Whenever he finds a company that he really believes in, he gets in on a position, and he plays the long game.
So, he bought, he held, and now, he’s looking at an absolutely massive return.
And while the company isn’t massively popular, he wasn’t the only person who snatched BYD shares for cheap. What sets him apart from everyone else is his long-term vision. A lot of people who bought before or during the time he got into the stock sold out of their positions during the various short-term volatility episodes. But Buffett knows how long-term investing works. He knows that, if a company is worthwhile, he should sit on his position.
In 2010, he said that he sees BYD as a “young and promising” player in the tech field, especially considering their rapid growth and excellent prospects for the future.
Then, during the COVID-19 lockdowns, he made an appearance, wearing a BYD mask with the message “I want to live to be 100 and still look good”, saying “My BYD mask is helping me achieve my goals”.
Who are BYD?
Now, let’s have a more detailed look at the company itself. So, as we already mentioned, Build Your Dream is an Asian (or specifically – a Chinese company, competing for the Chinese market). Founded in 1995, they have been present on the US market for over 12 years now. That’s probably one of the most important takeaways here – we aren’t looking at some brand-new IPO or something. This is an established company who has been around for quite a while.
As you can see from the graph, they’ve been doing “okay” for the last few years. By that I mean their stock was mostly stable at around $5-6 per share. But then, 2020 rolls around, and the price skyrockets. Currently, they’re sitting at $23.76. That’s a massive, and something that EV investors are familiar with. If you look at companies like NIO, Tesla and other EV manufacturers, you will notice similar price bumps during the same period.
But wait, there’s more!
BYD isn’t focused solely on Electric vehicles. The company is decently diversified, with their main sectors being electronics, automobiles and new energy and rail transit. Okay, and here’s the big thing that makes me personally like the company – their stated goal is to create and provide zero-emission energy solutions. So, yeah, I’m a bit biased. An EV company with great stats, which is also dedicated to decreasing emissions. I mean, what’s there not to like?
And, even though EVs aren’t their only goal, their products are competitively priced and can more than stand their own on the local market in China
BYD – Financials
Alright, now let’s get to the part that probably interests you the most – the numbers.
Between their total revenue
gross profit 27,558,640
, BYD’s income statement looks really solid. Their net income is also in the positives. This lets them stand out from some of the other Chinese EV manufacturers. They’re a rapidly growing, highly profitable business.
From an assets-to-liabilities standpoint, they’re doing okay. And, when we take in the bigger picture, they’re just an excellent business overall.
And this concludes our quick look at BYD. All in all, I see a ton of promise in this company, and I will keep track of how they do in the upcoming months. They’re going to make for an excellent long-term investment target. And, given my love for EV manufacturers, I’m going to have a difficult time staying away. Besides, I can’t just keep going on and on about Tesla, since that’d just be boring, right? You may also want to read my previous blogs such as ‘Let’s talk NIO stock‘.
Lately, I’ve been getting tons of messages on social media and emails with questions about individual stocks and investing in general. While I absolutely love helping you out and sharing my experience, I can already see how this will become very, very time-consuming in the near future, since our channel keeps growing. And, don’t get me wrong here, guys – I really enjoy interacting with you and you’re an amazing audience. But, answering the same question over by private messages and emails isn’t exactly what I’d call efficient.
This is why I’d like to invite all of you who are serious about investing to apply for my private investing Facebook group. And this is important – I only want positive, serious and dedicated investors there. I won’t tolerate negativity, trolling or anything like that. I only opened the group last week, and I’ve already approved about a dozen applications. So, if you want to learn, grow your portfolio and discuss stocks with like minded investors, you’re welcome to join us!
Now, I want to use the last few seconds of this blog to quickly answer a question that a lot of you have been asking recently – which is my favourite investing platform.
Currently, I use a couple of platforms, but the one that I consider the best and most useful for investors of all levels is definitely Etoro. Their platform is super-easy to use, they offer a wide range of options and there are also some excellent recommendations for new members. This is a referral link: Etoro – if you use them to create your account, you’re also supporting the channel at no added cost for you!
Morning brew is another tool that I would highly recommend. Morning brew is quick and straightforward daily newsletter service, which helps me stay up to date on the latest news from the financial world at the click of a button. The link to their website is also in the description.
So, in closing, I want to give a big shout-out to all of you who stayed with me until the end of the blog – you’re amazing!
As always, questions, ideas and experiences should go to the comments section down below. Oh, and don’t forget to give me a like if you enjoyed the content!
Thank you all for reading, and subscribe to my newsletter to always be in the loop. Stay green and motivated!
Recommended books for further reading:
- The Warren Buffett Way
- Shares Made Simple: A beginner’s guide to the stock market
- Smarter Investing: Simpler Decisions for Better Results
- Warren Buffett and the Interpretation of Financial Statements
- How to Make Money in Stocks: A Winning System In Good Times And Bad
If you are looking to open an investment account, follow these links below:
- Passive income
- Silver & Gold coins
- Interactive Brokers
(‘68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.)