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Should You Buy the Auto Stocks Right Now?

Strong demand, a transition to EV and autonomous driving, means investing opportunities in the auto industry.

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This story originally appeared on Zacks

- Zacks
  • (1:15) - How Are The Semiconductors Impacting The Auto Industry?
  • (6:45) - Are The Car Manufactures A Good Place To Start Investing?
  • (15:00) - How To Navigate Tesla’s Stock?
  • (20:35) - Is The Car Rental Market Making A Comeback?
  • (26:00) - Does The Service Industry Stand To Gain The Most?
  • (32:50) - Episode Roundup: GM, F, TM, RACE, TSLA, CAR, R, AAP, AZO, ORLY
  •                 Podcast@Zacks.com

 

Welcome to Episode #285 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

This week she’s joined by David Bartosiak, Zacks Stock Strategist and Editor of Zacks Surprise Trader newsletter, who is also Zacks resident auto expert, to talk about what is going on in the red-hot auto industry.

People have rushed out to buy cars since the pandemic began in order to avoid public transportation which has pushed up auto demand. But a shortage of semiconductors is also wreaking havoc with inventory. That has pushed up prices.

How should investors be playing this industry?

The stocks have rallied big off their 2020 coronavirus lows, but some of them have corrected again in 2021.

Is this a buying opportunity?

5 Auto Stocks for 2021

1.       General Motors GM has always been a fan favorite for investors. Shares have sold off 17% in the last 3 months, however, making them even cheaper. GM has a forward P/E of just 8.2. Is it high on Dave’s list?

2.       Ford F is also a fan favorite and it’s also cheap, with a forward P/E of 8. It, too, has sold off in the last 3 months, falling 15%. Is now the time to buy?

3.       Ferrari RACE shares have gone the other way, actually rising 5% over the last 3 months. This luxury car maker is soon to launch its highly anticipated SUV. With a forward P/E of 46, is it too hot to handle or priced right for the growth?

4.       Tesla TSLA is one of those stocks you either love, or hate. While shares are up just 5% year-to-date, they have rallied 22% in the last 3 months. It’s the most expensive of the auto makers, with a forward P/E of 145. But if you believe the argument that it’s really a “tech company,” does the valuation matter?

5.       Advanced Auto Parts AAP is a beneficiary of people keeping their cars even longer, and getting them repaired, rather than buying a new car at these record high prices. It’s trading with a forward P/E of just 17.5, which makes it among the cheaper auto stock plays this year.

What else should you know about cars, the auto industry and the stocks to keep on your wish list?

Tune into this week’s podcast to find out.



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Ford Motor Company (F): Free Stock Analysis Report

 

Advance Auto Parts, Inc. (AAP): Free Stock Analysis Report

 

General Motors Company (GM): Free Stock Analysis Report

 

Tesla, Inc. (TSLA): Free Stock Analysis Report

 

Ferrari N.V. (RACE): Free Stock Analysis Report

 

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