Tech Stock Sensei

1 Auto Stock To Sell And 2 To Buy

Lingering logistic disruptions in the semiconductor chip sector have caused substantial productivity hindrances in the auto industry. According to AutoForecast Solutions, microchip shortages have forced automakers globally to cut over 13 million vehicles from production plans since 2021.

Given the backdrop, it might be wise to avoid fundamentally weak auto stock Mullen Automotive Inc. (MULN).

However, the auto industry is evolving with significant technological advancement, which should drive growth. Demand for electric vehicles (EVs) has soared over the past years. The electric vehicles market is projected to witness a robust growth rate of 23.5% from 2019 to 2028.

Thus, investors looking to invest in the industry could consider buying quality auto stocks Volkswagen AG (VWAGY) and Honda Motor Company, Ltd. (HMC).

Stock to Avoid:

Mullen Automotive Inc. (MULN)

MULN is an electric vehicle manufacturer and distributor. Additionally, it runs the digital platform CarHub, which uses AI to give a user-friendly way to buy, sell, and own a car. It sells battery technology and emergency point-of-care solutions.

 MULN’s loss from operations came in at $18.22 million for the third quarter ended June 30, 2022, up 184.5% year-over-year. Its net loss came in at $59.47 million, up 289.9% year-over-year. In addition, its general and administrative expenses came in at $10.90 million, up 121.2% year-over-year.


Over the past year, the stock has lost 93.6% to close the last trading session at $0.64.

MULN’s POWR Ratings reflect this bleak outlook. The company has an overall rating of F, which translates to a Strong Sell in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

MULN has an F grade for Value and Stability and a D for Sentiment and Quality. MULN is ranked #55 out of 65 stocks in the Auto & Vehicle Manufacturers industry. Click here to access the additional POWR Rating for MULN (Growth and Momentum).

Stocks to Buy:            

Volkswagen AG (VWAGY)

Headquartered in Wolfsburg, Germany, VWAGY manufactures and sells automobiles primarily in Europe, North America, South America, and the Asia-Pacific region. The company has four segments: Commercial Vehicles; Power Engineering; Financial Services; and Passenger Cars and Light Commercial Vehicles.

VWAGY’s sales revenue came in at €69.54 billion ($69.43 billion) for the second quarter of 2022, up 3.3% year-over-year. Moreover, the company’s cash flow from investing activities came in at €7 billion ($6.99 billion), up 48.6% year-over-year.

Street expects VWAGY’s revenue to increase 4.2% year-over-year to $285.03 billion in 2023. Its EPS is expected to increase marginally year-over-year to $6.18 in 2023. VWAGY’s shares lost marginally intraday to close the last trading session at $18.23.

VWAGY has an overall A rating, equating to a…

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