Company / Analytics

Analytics, 26 January 2023

Auto Stocks To Consider For Your Portfolio

2022 economic woes that seemingly affected nearly all stocks did not spare Automotive stocks. Ferrari, having lost 18% in the year, was the best-performing Autostock that year. After significant growth in auto stocks in 2021, 2022 proved daunting with the EV startup bubble popping, low vehicle inventories, and rising interest rates. That was in addition to fears of a recession and overall “demand destruction” for industry sales.

These conditions have provided somewhat of a confusing situation for investors. On the positive, most automotive stocks are available at fair prices per share. On the flip side, however, economic uncertainties still haunt financial markets, and analysts remain divided about the likely market movements in the near future.

The adoption of EVs has also created an additional interesting situation in the vehicle sector, as investors pay attention to companies that look to transition to Electrification more swiftly.

In this article, we shall look at three automotive stocks that are worthy

General Motors Company

The General Motors stock was trading at 36.44 U.S. dollars as of the time of writing. It experienced a 3.08% rise today, translating to a 5.56% rise in the last six months. Though the previous year has not been kind to the stock with its drop to date standing at -30.78% for the past twelve months.

General Motors Company is an American automotive manufacturing company that has branches operating internationally. Its headquarters are located in Detroit Michigan in U.S. it is the largest automotive company in the United States. It was also the largest in the world for 77 years, until 2008 when its competitor Toyota Motor Corp took the crown. General Motors however met and satisfied a growing demand for cars and trucks in 2022 taking back this crown. This is even though there was a supply disruption in the industry.

The company plans to invest a billion dollars in plants all over the U.S. to support the production of electric vehicle parts and the next generation of V-8 gas engines. This shows that though the company plans to transition to fully electric production, it still shows it will still be producing gas engines for some time.

“Our commitment is to an all-EV future, no doubt about it,” Gerald Johnson, global head of GM’s manufacturing, told reporters after the announcement. “We know that has a horizon and between here and there, there are a lot of internal combustion engine customers that we don’t want to lose.”

Penske Automotive Group Inc

Penske Automotive stocks were trading at 117.73 U.S. dollars as of the time of writing. It is one of the most undervalued stocks given that it has been on the rise for the past year with a 15.21% rise and a 6.81% and 0.03% rise for the past six months and today respectively.

Penske Automotive Group, Inc. is a Michigan-based diversified transportation services company that operates automotive and commercial truck dealerships. The company operates mostly in the U.S., Western Europe, and Canada. It is mostly involved in four micro-sectors – Retail Automotive, Retail Commercial Truck, Other, and Non-Automotive Investments. The company repurchased 6.4 million units of common stock for $675.1 million year-to-date through October 25, 2022. Its HQ is in Detroit, Michigan.

Tesla Inc

Tesla Inc is an American multinational automotive and clean energy company headquartered in Austin, Texas. Tesla designs and manufactures electric vehicles and battery energy storage from home to grid-scale, solar panels and solar roof tiles, and related products and services. Tesla is one of the world’s most valuable companies and is, as of 2022, the world’s most valuable automaker.

In 2021, the company had the most worldwide sales of battery-electric vehicles and plug-in electric vehicles, capturing 21% of the battery-electric market and 14% of the plug-in market. Through its subsidiary Tesla Energy, the company develops and is a major installer of photovoltaic systems in the United States. Tesla Energy is also one of the largest global suppliers of battery energy storage systems, with 3.99 gigawatt-hours installed in 2021.

The stock was trading at 143.75 U.S. dollars as of the time of writing after a 7.74% rise in price today. This is despite the fact that the stock has not done so well in the past year. The stock fell by -46.45% in the past six months and -53.63% in the past year. The stock, however, seems to be on the rise once more and its road to recovery is paved with big expectations from investors.

Investor’s Note

There are many automotive companies that are going electric but their stocks are not doing so well, there are also some companies that are so stuck in the past that their future is obviously bleak. But most of the companies are either on the rise or will be in the foreseeable future.

For investors in search of diversifying their portfolio with stocks that also have a chance for earning well for them then automotive stocks are worth looking into. This applies even more so when thinking of E.V. stocks as well as those planning on going fully electric soon.

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