Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Workhorse Group and Tortoise Acquisition Popped on Monday

By Eric Volkman – Jun 29, 2020 at 5:47PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The two companies associated with electric vehicles were supercharged by good news.

What happened

One of the hottest segments on the stock market now is electric vehicles (EVs). This week got off to a roaring start for two stock connected to them -- Workhorse Group (WKHS 7.09%) and Tortoise Acquisition (SHLL), which accelerated almost 47% and 30% higher, respectively, on Monday.

So what

Workhorse, which specializes in electric delivery vans and drones, got a big shot of legitimacy on Monday when it was added to the Russell 3000 Index. Although being included on a storied equities index doesn't change the nature of a company's business, it confers legitimacy and makes a stock a candidate for some of the many index funds popular with investors these days.

A Workhorse EV.

Image source: Workhorse Group.

Tortoise Acquisition isn't technically an EV manufacturer... or a manufacturer of any kind. Rather, it's a special purpose acquisition company (SPAC) formed to acquire and absorb another business. Tortoise's target is Hyliion, a company that specializes in powertrains for electric and hybrid-electric heavy trucks.

Tortoise had no news of its own to report, but the optimism that greeted Workhorse's Russell 3000 news is spilling over. EVs are a growing part of the transportation landscape, and both companies are busy carving out their niches.

Now what

A white-hot sector always cools down. The excitement over EVs will subside, despite the big potential the segment holds for the future. Investors will expect growth and -- at some point -- profitability, and just now the EV industry is too young and capital-intensive to achieve either consistently.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Workhorse Group Inc. Stock Quote
Workhorse Group Inc.
WKHS
$2.87 (7.09%) $0.19
Tortoise Acquisition Corp. Stock Quote
Tortoise Acquisition Corp.
SHLL

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.