Analyzing the auto sector to find value can be a challenging proposition. The high volatility of the auto industry has led some investors to shy away from it. However, investing in auto stocks is brilliant, especially during recessions as car manufacturers release new models and pass on price cuts to consumers. Even in today’s volatile markets, there are plenty of great investment opportunities if you know where to look. Here are some of the best auto stocks to buy now and hold for the long term.
Lucid Group (LCID)
Lucid, formerly known as Atieva, is a start-up electric car company that has developed an all-new electric vehicle (EV). Its manufacturing facility is located in California, making it a domestic company whose fortunes are linked to the US economy. Lucid is backed by Chinese investors, including the Chinese sovereign wealth fund, which will help it ramp up production and meet demand. The company has already begun pre-production and plans to ship its first cars in the first half of 2020. Lucid has received plenty of media coverage, which could help it become a household name and boost sales. Lucid’s price could surge if it deals with a major car manufacturer for its technology and secures additional funding.
Winnebago Industries (WGO)
Winnebago Industries, a specialty vehicle manufacturer, produces motor homes, travel trailers, and diesel engines for other industries. The company has benefited from the resurgence of the RV market in recent years and the strong US trucking industry. Winnebago’s fortunes are so closely linked to the US economy and its customer’s ability to purchase its products that it’s worthwhile to see how the economy is doing. The company is investing in research and development to develop new models and introduce new technologies. WGO’s high cash flow and low debt make it an attractive long-term investment.
Tesla is the most expensive auto stock on this list, but it’s also one of the most innovative. The company is promoting clean energy and sustainability, leading to massive growth in recent years. Recently, Tesla has seen a decline in its stock price as investors worry about its ability to meet production targets for its Model 3 electric sedan. However, even if production falls behind schedule, Tesla could still be a sound investment. The company has plenty of cash, has sold some profitable Model S and Model X SUVs, and has an innovative Model Y crossover. As a result, Tesla’s stock price is likely to soar once it resumes growth and delivers on its promise to produce affordable electric vehicles for the masses.
The fisherman is a manufacturer of electric boats and motors designed explicitly for largemouth bass fishing. The company sells its products through a network of dealers used by professional and recreational anglers around the US. Fishermen’s branding and product placement in competitive tournaments has helped it become one of the best-known brands in the industry. Fishermen have also been consistent innovators, releasing new products and constantly improving their existing lineup. As a result, the company has very high brand awareness and a loyal customer base. As a result, fishermen’s stock price has risen steadily since 2016 and will likely continue.
Others to Consider
Consider adding these companies to your portfolio if you’d like to diversify your auto stock investments. They are all strong companies with strong brands and will most likely outperform the broader auto sector. Atlas Copco: This is a manufacturer of construction, mining, and other industrial equipment. Caterpillar: Caterpillar is a manufacturer of construction and mining equipment. Ford Motor: Ford makes and sells cars, trucks, and SUVs. General Motors: GM is another major car manufacturer.
The auto industry is a risky place to invest, but there are opportunities for strong returns if you know where to look. Lucid is developing an innovative electric vehicle that will likely be very popular once it hits the market. Winnebago is an established manufacturer that has benefited from the strong economy and a resurgence in the RV market. Tesla is a high-risk, high-reward investment that could be a game changer if it meets its production targets. Finally, Fishermen is a steady performer with a loyal customer base.