Tips, Tricks & Trends

6 Auto Stocks to Take a Chance On

Ferrari logo on a flag flying in the wind.

Historically, investing in auto stocks has been risky business as many variables coming into play. Auto stocks are down 11% hitting an all-time low in years while GM and Ford are taking big hits.

But some investment analysts are remaining optimistic due to the changes that struggling auto manufacturers have made to stay relevant in this changing market. With smart mergers and refocusing efforts, companies are at least trying to right the ship.

Ford, GM, and BMW have also launched rideshare programs in an effort to compete with the likes of Lyft and Uber, putting more of its vehicles on the road and at the same time addressing the mobility needs of large urban communities.

US News and World Report advise that these six stocks are worth taking a look at. 

Aptiv (APTV): an auto stock that provides car software

A supplier of software and computing programs to automobile manufacturers, Aptiv has had a strong quarter. Buy rating is valued at $92 for APTV stock by Bank of America. Yahoo Finance explains that you should retain APTV in your portfolio. Earning an impressive B in the Growth score and long-term earning’s growth predicted to be 11.1% is credited in part to Aptiv being a leader in vehicle safety solutions.  

CarMax (KMX): dominating the used car market

Investor’s Business Daily reports better than expected second-quarter earnings for the popular used car retailer. With 200 brick and mortars and offering online shopping and shipping, CarMax boasts 95% customer satisfaction.

Contributing to its success is the 7-day warranty that the company offers, allowing drivers to return a vehicle within this window of time for any reason if they are not satisfied. With record numbers of off-lease vehicles and trade-ins returning to the market, sales are expected to have steady growth. Buy rating for KMX stock is at $150 per Bank of America.

Magna International (MGA):

The Toronto based automotive supplier that is in the business of manufacturing parts, components, trim, electronics and more, saw complete vehicle revenue up 40.8% in the second quarter.

Forbes recommends diversifying your portfolio with MGA, the largest producer of auto parts in North America. Sales have grown close to 14% annually and earnings growth at nearly 18% making this a very “attractive” choice despite the cyclical nature of the automotive business. Bank of America has a buy rating of $60. 

Asbury Automotive Group (APG): a thriving dealership

This Fortune 500 auto dealership operates 80 dealerships and 25 collision repair centers across the nation and has maintained a 16.4% gross margin. Shareholders enjoyed an 81% share price gain according to Simply Wall St. And APG has been able to grow its earnings per share 12% per year for the past 3 years. Buy rate at $95 for APG stock according to Bank of America. 

Ferrari (RACE): a luxury auto stock

Another stock to watch today according to Schaeffer Research is the luxury car maker revealing new products including the $289,000 F8 Spider. Although RACE shares are down 6.1%, it’s still “14 points above their 200-day moving average“. Shipments out of China, the Middle East, Africa, and Europe were better than expected and up 8.4%. Bank of America’s buy rate is at $225 a share.

Kar Global (KAR): another used car stock

A leader in used car financing, Kar Auction Services recently rebranded as Kar Global is also the second-largest auto auction company in North America. The second quarter saw 18% business revenue growth which includes a 7% increase for revenue per vehicle. A 2% revenue growth was also reported in the financing division. Buy rate is at $32 per Bank of America.