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Zacks Market Edge Highlights: General Motors, Ford, Lithia Motors, CarMax and Ferrari
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For Immediate Release
Chicago, IL – August 03, 2017 – Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: (https://www.zacks.com/stock/news/270263/auto-stocks-an-investors-dream-or-a-nightmare)
Auto Stocks: An Investor’s Dream or Nightmare?
Welcome to Episode #92 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.
In this episode, Tracey is joined by David Bartosiak, Editor of Zacks Momentum Trader and Home Run Investor as well as host of Zacks Live Trader on YouTube, and Eric Vizinas, Zacks Studio Manager, to discuss what is going on in the auto industry in 2017.
Are You Buying a Car in 2017?
Eric joins the discussion because he is actually in the market to buy a new car. But he’s had an interesting experience with the Chicago area auto dealerships. Let’s just say they’re very eager right now to make a sale. He explains.
July auto sales in the United States weren’t great. Inventory remains a problem which is leading to work slowdowns and furloughs at factories while the dealers try and move the old merchandise.
American demand has peaked around 17 million cars. Many experts expect it to remain between 16 and 17 million over the next few years. In other words, they don’t see a significant slowdown. It will be more like treading water.
What does that kind of market mean for investors?
The Auto Makers Are Cheap
There’s no doubt that the auto manufacturers have cheap valuations.
1. General Motors (NYSE:(GM - Free Report) – Free Report) is trading with a forward P/E of just 5.8 and pays a dividend yielding 4.2%.
2. Ford (NYSE:(F - Free Report) – Free Report) has a forward P/E of 6.7 and is paying a dividend yielding a juicy 5.4%.
Is this a buying opportunity in the auto makers?
Are the Dealerships the Way to Go?
The dealers are more diverse than the auto makers. They sell new and used cars as well as handle parts and services. That means they have various forms of revenue streams.
Lithia Motors(NYSE:(LAD - Free Report) – Free Report), for example, had solid numbers in its parts and services division in the second quarter even as auto sales slowed. Parts and Service revenue was up 7.1% with its body shops seeing a gain of 10%.
There are 3 other big auto dealers that also compete in the US, and globally, with exposure to Brazil and the United Kingdom.
They’re all cheap, with forward P/Es under 13.
Should investors be looking at the dealers right now?
Look for Niche Businesses
If you’re seriously considering investing in the auto stocks, Dave thinks going “niche” is the way to go.
1. CarMax (NYSE:(KMX - Free Report) – Free Report) specializes only in used cars. It’s expected to see double digit earnings growth this fiscal year.
2. Ferrari (BIT:(RACE - Free Report) – Free Report) is trading with a forward P/E of 39 but it’s not like other car companies. Dave waxes poetically about what makes Ferrari different from the mass market auto makers. Shares have soared, however. But is it too late to get in?
What else should you know about the auto stocks?
Find out on this week’s podcast.
Want to Learn How to Trade Options?
Have you always wanted to trade stock options but are unsure where to begin or what to look for?
Each week, Zacks’ Dave Bartosiak will bring you a detailed explanation of the trades “live” on YouTube.
Watch him go through the trade as he answers your questions in real time.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Market Edge Highlights: General Motors, Ford, Lithia Motors, CarMax and Ferrari
For Immediate Release
Chicago, IL – August 03, 2017 – Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: (https://www.zacks.com/stock/news/270263/auto-stocks-an-investors-dream-or-a-nightmare)
Auto Stocks: An Investor’s Dream or Nightmare?
Welcome to Episode #92 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.
In this episode, Tracey is joined by David Bartosiak, Editor of Zacks Momentum Trader and Home Run Investor as well as host of Zacks Live Trader on YouTube, and Eric Vizinas, Zacks Studio Manager, to discuss what is going on in the auto industry in 2017.
Are You Buying a Car in 2017?
Eric joins the discussion because he is actually in the market to buy a new car. But he’s had an interesting experience with the Chicago area auto dealerships. Let’s just say they’re very eager right now to make a sale. He explains.
July auto sales in the United States weren’t great. Inventory remains a problem which is leading to work slowdowns and furloughs at factories while the dealers try and move the old merchandise.
American demand has peaked around 17 million cars. Many experts expect it to remain between 16 and 17 million over the next few years. In other words, they don’t see a significant slowdown. It will be more like treading water.
What does that kind of market mean for investors?
The Auto Makers Are Cheap
There’s no doubt that the auto manufacturers have cheap valuations.
1. General Motors (NYSE:(GM - Free Report) – Free Report) is trading with a forward P/E of just 5.8 and pays a dividend yielding 4.2%.
2. Ford (NYSE:(F - Free Report) – Free Report) has a forward P/E of 6.7 and is paying a dividend yielding a juicy 5.4%.
Is this a buying opportunity in the auto makers?
Are the Dealerships the Way to Go?
The dealers are more diverse than the auto makers. They sell new and used cars as well as handle parts and services. That means they have various forms of revenue streams.
Lithia Motors(NYSE:(LAD - Free Report) – Free Report), for example, had solid numbers in its parts and services division in the second quarter even as auto sales slowed. Parts and Service revenue was up 7.1% with its body shops seeing a gain of 10%.
There are 3 other big auto dealers that also compete in the US, and globally, with exposure to Brazil and the United Kingdom.
They’re all cheap, with forward P/Es under 13.
Should investors be looking at the dealers right now?
Look for Niche Businesses
If you’re seriously considering investing in the auto stocks, Dave thinks going “niche” is the way to go.
1. CarMax (NYSE:(KMX - Free Report) – Free Report) specializes only in used cars. It’s expected to see double digit earnings growth this fiscal year.
2. Ferrari (BIT:(RACE - Free Report) – Free Report) is trading with a forward P/E of 39 but it’s not like other car companies. Dave waxes poetically about what makes Ferrari different from the mass market auto makers. Shares have soared, however. But is it too late to get in?
What else should you know about the auto stocks?
Find out on this week’s podcast.
Want to Learn How to Trade Options?
Have you always wanted to trade stock options but are unsure where to begin or what to look for?
Each week, Zacks’ Dave Bartosiak will bring you a detailed explanation of the trades “live” on YouTube.
Watch him go through the trade as he answers your questions in real time.
Become one of Dave’s minions. Join the Zacks Live Trader community today. Click here for a free 14-day trial >>>
Tracey Ryniec manages the Insider Trader and Value Investor portfolios at Zacks.com. She hosts 2 weekly podcasts: Zacks Market Edge Podcast and the Value Investor Podcast. You can also catch her on Twitter at @TraceyRyniec.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.