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I am revisiting my thesis on Archer Aviation Inc. (NYSE:ACHR) after the stock is up by 58% since my hold rating back in March.
The eVTOL race is heating up, and the market is already pricing
Archer: The Sky Is The Limit, For Now
Summary
- I believe the market is not paying attention to fundamentals or to Archer's FAA type rating progress (15%) vs Joby's (62%).
- What matters now is the excitement around the upcoming launch in Abu Dhabi, along with Trump's executive order to establish an eVTOL integration pilot program in the US.
- I believe sentiment in the eVTOL space prevails over fundamentals. This is the main reason I am not considering shorting Archer, or any other eVTOL stock.
- That said, I'm not adding Archer to my portfolio either, as I don't see enough news or announcements to sustain the share price in the double digits until year-end.
- I may reconsider my Hold rating around the launch in Abu Dhabi. Until then, I am happy to remain on the sidelines.
Small deep value individual investor, with a modest private investment portfolio, split approx. 50%-50% between shares and call options. I have a B.Sc. in aeronautical engineering and over 6 years of experience as an engineering consultant in the aerospace sector. The latter statement is not relevant in any way whatsoever to my investment style, but I thought to add it for self-indulgent purposes. I have a contrarian investment style, highly risky, and often dealing with illiquid options. How illiquid? Well, you can land a Jumbo on the spread and still have clearance for take-off. From time to time, I buy shares, mostly to not be categorized as a degen by my fellow investor friends, therefore the 50%-50% allocation. My timeframe tends to be between 3-24 months.I like stocks that have experienced a recent sell-off due to non-recurrent events, particularly when insiders are buying shares at the new lower price. This is how I often screen through thousands of stocks, mainly in the US, although I may own shares in banana republics. I use fundamental analysis to check the health of companies that pass through my screening process, their leverage, and then compare their financial ratios with the sector, and industry median and average. I also do professional background checks of each insider who purchased shares after the recent sell-off. I use technical analysis to optimize the entry and exit points of my positions. I mainly use multicolor lines for support and resistance levels on weekly charts. From time to time I draw trend lines, taken for granted, in multicolor patterns. Note: I tried to keep my introduction as real, and authentic as possible. I dislike empty suits, high-level BS, deep-level BS, unnecessary jargon, and self-indulgent, third-person written introductions with an air of superiority.Thanks for reading my introduction!
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