DNB Asset Management increased investments in Tesla and Plug Power, and initiated positions in Nikola and XPeng in the third quarter.
Justin Sullivan/Getty Images
A large asset manager recently increased bets on the electric-vehicle industry with changes in its U.S.-traded stock investments.
In the third quarter, DNB Asset Management increased investments in EV giant Tesla (ticker: TSLA), and tripled holdings in Plug Power (PLUG), a maker of fuel cells that run on hydrogen. It also initiated positions in embattled electric and hydrogen trucking firm Nikola (NKLA) and Chinese EV maker XPeng (XPEV). The bets appear to be mostly paying off, as three of the shares are comfortably ahead of the market so far in the fourth quarter. DNB Asset Management, a unit of Norway’s largest financial-services firm DNB, disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission.
DNB, which manages more than $70 billion in assets, didn’t respond to a request for comment on the transactions.
DNB bought 23,403 more Tesla shares to end September with 146,516 shares. Tesla stock managed to gain 9.9% in the first three quarters of 2021, compared with a 14.7% rise in the S&P 500 index. But Tesla shares have surged 17% so far in the fourth quarter, topping the 5.5% rise in the S&P 500.
Tesla’s fiscal third-quarter earnings set a record, and analysts raised price targets. The company has been having an impressive run in China. Tesla CEO Elon Musk recently taunted Amazon.com (AMZN) founder Jeff Bezos over who had a higher net worth. Tesla stock itself set a closing high on Friday.
DNB Asset Management bought 1.2 million more Plug Power shares to end the third quarter with 1.6 million shares. Plug Power stock slipped 25% in the first nine months of 2021, but so far in October, shares have surged 28%.
Plug Power’s second-quarter sales beat expectations, and investors looked past its wider-than-expected losses, as the company is focused on growth. We noted earlier this month that Plug Power hasn’t been lacking catalysts. CEO Andy Marsh has talked up the company’s partnerships.
DNB bought 188,606 Nikola shares in the third quarter. It hadn’t owned any at the end of the second.
Nikola stock tumbled 30% in the first nine months of the year. In July, Nikola founder and former CEO Trevor Milton was charged by federal prosecutors with making misleading and false statements to the company’s investors. Milton, who resigned from the company in 2020, denied wrongdoing at the time of the charges.
The company is trying to distance itself from the charges, noting that the government actions are against Milton individually, and not against Nikola itself. The charges stem from Milton’s alleged actions from November 2019 to September 2020, while he was CEO. Nikola become a publicly traded company by merging with a special-purpose acquisition company, a transaction completed in June 2020. This month, however, Nikola stock rose after the company reached a lease agreement for 100 vehicles. Shares have lost half a percentage point so far in October.
The asset manager also initiated a position in XPeng, buying 12,060 American depositary receipts.
XPeng ADRs slid 17% in the first nine months of the year, but so far in October it has surged 21%. XPeng, along with other publicly traded Chinese companies, face sregulatory risk at home. Yet China also holds potential, as seen by XPeng’s strong deliveries. Last week, XPeng announced an investment in flying cars.
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at [email protected] and follow @BarronsEdLin.
