These Auto Stocks Have Crushed Earnings; 2 Are Outpacing Tesla Stock This Month

Top Automotive Stocks To Watch In November 2020

After a nearly 400% rally this year in Tesla’s (TSLA Stock Report) stock, now’s the time when the rubber meets the road for the largest automaker by market cap. Despite posting another blowout quarterly report, TSLA stock has been relatively flat. You could say that the stock is currently priced to perfection. Or maybe investors are just waiting for the election to be over before starting to put their money in again. There is just too much uncertainty going around in the stock market. However, there’s always a silver lining no matter how bearish the market may be for the industry. For instance, fast-growing Chinese electric maker Nio (NIO Stock Report) continues to climb to new heights amid strong deliveries and new production lines. 

Some people think that the stock market today appears to be quite unusual. But its dynamic has been a boon for certain auto stocks. The automotive industry appears to be gaining some traction. No, I’m not just talking about pure-play EV stocks, but traditional automakers that have been investing aggressively to have a piece of the electric vehicle industry. This means that some of the best automotive stocks to buy may come from surprising names. With all that in mind, let’s take a closer look at three automotive stocks that are trending in the stock market recently.

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Top Automotive Stocks To Watch On November: Ford

Ford Motors (F Stock Report) blew away analysts’ expectations as well as the company’s forecast earnings for the third quarter on stronger-than-expected demand during the coronavirus pandemic. The company reported $34.71 billion in revenue vs $33.51 billion expected. Higher demand for Ford trucks and SUVs as well as commercial vehicles in the North American market boosted the company’s quarter. With a market cap of about $31 billion, its price-to-sales ratio is just 0.24. That’s way lower than Tesla’s 15.82. Of course, revenue isn’t everything. Profits matter too, if not more. Ford may have strong sales, but it needs to improve its margins. And they are on the right track. Ford has been hard at work polishing its vehicle lineup. If you are a petrolhead, you would have noticed it as well.

top automotive stocks to watch (F stock)

In recent years, Ford has discontinued a number of models including the Fiesta, Focus, Taurus, and Fusion. It is focusing more on trucks and SUVs which offer higher margins. Morgan Stanley analyst Adam Jonas estimated that the F-Series pickup trucks could contribute to 90% of the company’s worldwide profits. That is a testament to Ford’s image as a pickup truck specialist. The upcoming Ford Bronco which is expected to be released next year could also be a boost to Ford’s profits. Many are already giving rave reviews, with its retro styling. 

Apart from those mentioned above, the company also invested heavily in the electric vehicle and autonomous vehicle end. You can say that Ford has tremendous potential to become a force to be reckoned with its major restructuring and more incorporation of technology into its vehicles. As the iconic American auto pioneer incorporates more technology elements into its vehicles, will F stock see brighter days ahead? 

Top Automotive Stocks To Watch On November: General Motors

General Motors (GM Stock Report) is one of the top auto stocks to watch in the market right now. In a test by Consumer Reports, GM’s Super Cruise technology has outshined Tesla’s Autopilot, the latter finishing a “distant second”. GM may be an old dog in the industry, but this old dog can definitely learn and even master new tricks. “Even with new systems from many different automakers, Super Cruise still comes out on top due to the infrared camera ensuring the driver’s eyes are looking toward the roadway,” Consumer Reports‘ Kelly Funkhouser 

automotive stocks to buy (GM stock)

Don’t forget that the company has recently revealed the comeback of Hummer. And this time, it’s all-electric. The vehicle has a 350-mile range, 1,000 horsepower, and up to 11,500-pound-feet of torque. And with a starting price of $80,000, it’s easily twice the cost of a gas-powered pickup. Nevertheless, the resurrection of the legendary brand has certainly generated enough attention.

General Motors has an impressive lineup of EVs. The company’s Chevrolet Bolt and Chevrolet Volt are among the best selling EVs in the US. Both of the models are much more affordable compared to Tesla’s models. Meanwhile, the truck is expected to go into production late next year. GM’s diversified range of options would certainly be a welcome news for customers. With the industry stalwart setting its sights on the future, will GM stocks continue to run up this year.

[Read More] These Chinese EV Stocks Continue To Soar; Is It Too Late To Buy Now?

Top Automotive Stocks To Watch On November: O’ Reilly Automotive

O’Reilly Automotive (ORLY Stock Report) may not exactly be an automotive company, but this pick and shovel play is definitely worth the mention. The aftermarket parts seller reported better than expected third-quarter earnings. The company posted quarterly revenues of $3,207.6 million, which topped the consensus mark of $2,978 million. Moreover, the top line comes in higher than the prior-year level of $2,666.5 million. The automotive industry is clearly looking better than many analysts have been expecting.

best auto stocks (ORLY stock)

“Our Team’s hard work and commitment to expense control resulted in another extremely profitable quarter, exemplified by our 22.6% operating profit margin, which represents a 249 basis point improvement over the prior year.” However, he also added that “We continue to maintain a cautious approach to managing our operating costs in these uncertain economic conditions and remain steadfastly focused on providing the excellent customer service that drives long-term profitable growth.” – O’Reilly’s CEO Greg Johnson

There’s no question that the coronavirus pandemic has adversely affected auto-parts retailers like O’Reilly Automotive and Advance Auto (AZO Stock Report). But as the economy slowly rebounds, these auto parts stocks could generate strong returns again for shareholders after a few painful quarters brought by the pandemic. Add to the fact that people are still avoiding public transportation, and can’t spend their money on other entertainment options. Could DIY auto parts see more tailwinds? Looking at the company’s exceptional track record, is ORLY stock a defensive stock to buy with the recovering economy?

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