- Cenntro Electric Group (CENN) holds much more promise than its predecessor, Naked Brand.
- The company’s big investment in Europe is pricey, yet it could put Cenntro in an advantageous position.
- Investors should acknowledge the risks involved, but consider a long stock position in Cenntro anyway.
It might seem like a fever dream now, but online lingerie seller Naked Brand Group transitioned into Cenntro Electric Group Limited (NASDAQ:CENN) not long ago. Today, CENN stock is actually worth investing in, as long as you fully understand the potential pitfalls.
Even while the Covid-19 pandemic precipitated a shift to e-commerce, NAKD stock performed poorly. It could barely stay above $1. This meant that delisting from the Nasdaq exchange was a possibility.
Thankfully, there has been a change and Naked Brand is now Cenntro Electric. There is a new business model, a new stock ticker and most of all, a new hope that the company’s investors can book some nice profits in the end.
| CENN | Cenntro Electric Group Limited | $1.74 |
What’s Happening with CENN Stock?
Let’s not get the wrong idea here, though. Cenntro Electric is still a fairly small company with a market capitalization of roughly $454 million and CENN stock is still a low-priced and volatile asset.
The risk is apparent here, as it is not unheard of for the Cenntro share price to move 5% or more in a single trading session. This is not unusual for a $2-ish stock, so brace yourself and please keep your position sizes small.
At least, we can say that there is no immediate Nasdaq delisting threat. We have to celebrate the small victories in life, you know?
Besides, Cenntro Electric is making big progress for a small company. Already, the company has celebrated 3,600+ vehicles delivered, over 20 million miles traveled and more than 238 patents granted. Moreover, Cenntro is certified in 32+ countries, is shipping out to 16+ countries and has at least six assembly plants.
Plus, as InvestorPlace contributor Alex Sirois points out, Cenntro Electric committed to produce 20,000 vehicles this year. For all we know, you might soon see thousands of Cenntro’s Metro commercial electric vehicle (EV) on the roadways in the near future.
A Bold Move in Europe
Furthermore, Cenntro Electric has global ambitions. A recent press release indicated that Cenntro is taking a sizable stake in a decidedly Euro-centric company.
Here’s the scoop. Just recently, Cenntro Electric acquired a 65% equity interest in Tropos Motors Europe GmbH, a wholly owned subsidiary of Mosolf SE & Co. KG.
That’s a mouthful, so I’ll break it down. Tropos Motors Europe specializes in compact, commercial EVs. You might see them delivering packages, or getting people from Point A to Point B in amusement parks, sports facilities or even zoos.
It makes perfect sense, then, for Cenntro to invest in Tropos. The two businesses are similar and Tropos already has a market presence in Europe.
The press release succinctly quantifies Tropos’ market presence:
“As of March 2022, [Tropos Motors Europe] has a distribution network of 50 dealers in Germany and 13 importers in Europe across sixteen countries, including France, Spain, Portugal, the Netherlands, Belgium, Austria, Italy, Denmark, and the Czech Republic.”
If Cenntro Electric is going to invest in any European commercial EV maker, this is as good a choice as any. Only time will tell, but Cenntro could prove to be highly successful in its foray into Europe’s high-potential commercial EV market.
What You Can Do Now
Naked Brand is gone and hardly missed, to be honest. Granted, Cenntro Electric still has to prove itself as a viable business for the long-term.
However, at least we can say that the company has already delivered thousands of vehicles. Furthermore, the investment in Tropos Motors Europe could prove to be extremely lucrative.
In the final analysis, CENN stock represents a speculative wager on an up-and-coming EV market contender. So, be mindful of the risks, but feel free to pick up a few shares while they’re still quite affordable.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.