Despite Tesla’s slowing sales growth, several auto stocks have been among the stock market’s top performers this year. While Tesla’s stock has largely lagged the broader market, a few domestic automakers have outperformed, thanks to their steady growth and attractive valuations.
Joining them is foreign automaker Toyota Motor whose monstrous growth has been fueled by its extensive lineup of hybrid electric vehicles (HEVs). The options of HEVs and traditional gasoline vehicles appear to be separating these top automakers from Tesla at the moment.
Toyota Motor’s Market Edge
The track record of selling some of the most dependable and durable cars on the market has built Toyota Motor’s brand and loyal customer base. This has allowed the Japanese automaker to go from selling cheaper-than-average cars for most of the 1980s and ’90s to offering electrified vehicles that can have a price tag of up to $60,000.
Nowadays, Toyota Motor’s brand is thought to be worth nearly $30 billion, second among all global automakers next to Tesla.
General Motors Increased Profitability
Often overlooked as just a value stock, General Motors’ increased profitability has become very appealing considering shares trade at just 4.3X forward earnings. With GM trading around $40, its stock looks compellingly cheap as annual earnings are expected to pop 17% this year and rise another 3% in FY25 to $9.25 per share.
Notably, General Motors has regained the crown as the top-selling automaker in the United States and delivered 75,883 all-electric vehicles in 2023, second in the domestic market behind Tesla.
PACCAR’s More Attractive Valuation
Remaining a dominant leader among truck manufacturers, PACCAR is also ahead of the adaptation to hybrid and all-electric models for big rigs while others have seemingly failed, with Nikola being a prime example.
PACCAR’s expansion and strong price performance have left little doubt, with PCAR shares up +96% over the last three years. However, what is most enticing is that PACCAR’s stock currently trades at a reasonable 14.1X forward earnings multiple, a significant discount to its decade-long high of 28X and near the median of 13.8X.
Blazing YTD Performances
Correlating with their market dominance at the moment, Toyota Motor’s stock has soared +28% year to date, with PACCAR and General Motors shares up +21% and +13% respectively, which has blasted Tesla’s -34% and topped the S&P 500’s +7%.
Bottom Line
Toyota Motor, General Motors, and PACCAR’s stocks are all enjoying positive earnings estimate revisions. Considering their attractive P/E valuations, now looks like an ideal time to buy. These hot auto stocks all sport a Zacks Rank #1 (Strong Buy) and have an “A” Zacks Style Scores grade for Value.
Revving Up: Auto Stocks Primed for Acceleration
Unveiling Promising Tickers
Among the tumultuous terrain of the stock market, certain tickers stand out, deemed as “Most Likely for Early Price Pops.” This exceptional selection has a track record that speaks volumes.
The pedigree of these stocks reaches back to 1988, a bygone era in the financial landscape. Surpassing market performance over two-fold, these chosen few boast an impressive average annual gain of +24.2%. In a world where market dynamics evolve swiftly, these stocks have exhibited remarkable consistency.
Investors seeking an edge in the ever-fluid market are wise to direct their immediate attention to these hand-picked selections, poised for potential growth.
The Power of Historical Performance
A robust historical context offers a lens into the future trajectory of these stocks. Since the late ’80s, these chosen tickers have navigated periods of prosperity and downturns, demonstrating resilience and the ability to outperform.
Investors who delve into the annals of market history would find wisdom in recognizing the steadfast nature of these stocks. Their consistent outperformance serves as a beacon of hope in times of uncertainty.
The Auto Industry’s Driving Force
Within the broad expanse of the market, the automotive sector has long been a driving force. Companies within this sector, such as the esteemed Toyota Motor Corporation, PACCAR Inc., General Motors Company, Tesla, Inc., and Nikola Corporation, carry the torch of innovation and growth.
As the world evolves towards sustainable transportation solutions, these auto giants remain at the vanguard of technological advancements and market trends. Investors keen on aligning their portfolios with the future of mobility would be prudent to explore opportunities within this sector.
Navigating Market Trends
Amidst the whirlwind of market trends and economic indicators, identifying stocks with potential for growth becomes paramount. The discerning investor, equipped with market insights and a penchant for strategic decision-making, can capitalize on opportunities within the auto industry.
With a keen eye on emerging trends and a firm grasp of historical performances, investors can chart a course towards financial success. These hand-picked auto stocks present an avenue for growth in a dynamic market environment.
As investors navigate the landscape of opportunities, the resilience and potential of these auto stocks shine brightly, offering a beacon of hope for those seeking to steer their portfolios towards prosperity.
