The Elite Portfolio: Why Savvy Investors Are Backing These Overlooked Stocks
Yahoo Finance ·
Investors might not be able to find two automakers more different than Ferrari ( RACE +0.61% ) and Chinese electric vehicle (EV) juggernaut BYD ( BYDDY -2.17% ) . The two contrast significantly: Ferrari focuses on ultra-luxury supercars in high-end niche markets, and BYD has made a name for itself by undercutting competitors globally through vertical integration. Despite their strategic differences, both have compelling advantages that bode well for savvy investors and both are widely trailing the broader S&P 500 over the past year. Here's why some investors back these companies, and why potential investors should take a deeper look. The first thing savvy investors understand about Ferrari is how unique it is in the automotive industry, which is known for being low-margin, capital-intensive, and subject to economic downturns. Those narratives bounce off Ferrari just as ineffective bullets bounce off Superman. The first example of this can be found in Ferrari's margins compared to the broader industry; it's simply operating on an entirely different level. RACE Operating Margin (TTM) data by YCharts Not only does Ferrari's operating margin dwarf the competition, but you'll notice in the graph that its margins have consistently improved over the past decade. This tells investors that Ferrari's economic moat and competitive advantages are strengthening. Ferrari has nearly unmatched pricing power and can even generate demand for vehicles priced into the millions of dollars for special variants such as the F80.
DYAX Investor Sentiment
Bullish (Long) 51% · Bearish (Short) 49%
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