APTV scored a record high yesterday out of the gate
Auto parts manufacturer Aptiv PLC (NYSE:APTV) started the new year on the right foot, scoring a record high of $131.97 out of the gate yesterday. Since dipping below $30 back in March, APTV has carved out a channel of higher highs, guided by its ascending 20-day moving average. However, with the stock's 14-day Relative Strength Index (RSI) sitting up at 68 on the cusp of "overbought" territory, a short-term breather may be imminent.
Aptiv does has a manageable balance sheet with $2.12 billion in cash and $4.42 billion in debt. But the company also lacks steady revenue and net income growth, having reported a decline in annual revenue over the past two years. Nonetheless, APTV has demonstrated significant revenue growth of $1.1 billion since 2017. The company has also generated a total revenue of $14 billion in just the past 12 months. Despite the inconsistent growth, APTV has also grown its net income by about $1 billion since 2017, bringing its annual profit to $2.3 billion.
Furthermore, at a market cap of $34.97 billion, Aptiv is far from a small company but could continue growing as the world transitions to alternative fuel vehicles. In addition, Aptiv stock still trades at a relatively low price-earnings ratio of 19.73. At the moment, the biggest red flag for the company for potential investors is its lack of significant growth. However, APTV is still a very intriguing speculative play for investors intrigued by the electric vehicle industry.
Lastly, Aptiv stock's short-term options are attractively priced. Specifically, the equity's Schaeffer's Volatility Index (SVI) of 45% is in just the 18th percentile of its annual range, suggesting near-term options are pricing in relatively low volatility expectations for APTV. And the good news for options buyers: Aptiv stock hasn't had a problem making big moves. The stock's Schaeffer's Volatility Scorecard (SVS) sits at a lofty 79 out of 100, suggesting APTV has consistently exceeded the volatility expectations priced into its options over the past year.