Chinese electric car manufacturer Nio Inc (NIO Stock Report) has had a pretty rough time since March 2019. But it seems that the penny stock is now turning around its business slowly but surely. July has seen the company starting its turnaround after it fell off a cliff in March.
This came amid concerns about its deliveries and doubts about its business model. The subsidy for electric car buyers in China was cut substantially, which helped spark all of this concern. Since then, NIO stock has gained as much as 44% in July so far and therefore warrants a closer look.
Penny Stock To Watch: NIO
Despite the recent gains, this penny stock is still down 65% from its all-time highs in March. That’s when it was trading for more than $11. Last week, NIO stock jumped by 6.07% and rose to highs of $3.72 a share. The reasons behind its fall were numerous.
In addition to the cut to subsidies, the Chinese government had also asked for extra safety checks back in June. NIO had to recall as many as 500 units that were already sold. Additionally, the trade war between the US and China played its part in NIO taking a substantial hit to its stock price.
However, things are slowly getting a bit more positive for NIO after months of unfavorable developments. These could be reasons to put this on your list of penny stocks to watch. The trade war has not turned out to be as damaging as it had been expected. In fact, trade delegations from the two countries are going to meet in Shanghai this week. Additionally, Tesla’s record deliveries in the second quarter also gave NIO a boost.
Last but not least, car sales in China are picking up after months of disappointing numbers. After declining for 12 months on the trot, car sales rose by 5% in June. That has also had a positive effect on NIO. Is NIO one of the penny stocks to buy or sell during the second half of 2019?