The U.S. auto industry will be releasing light vehicle sales numbers on Tuesday, and Buckingham Research Group analyst Joseph Amaturo has some recommendations for stock traders looking to play the results.
According to Amaturo, January and February are typically the two weakest months of the year for U.S. auto sales, but Buckingham is looking for some relatively strong numbers on Tuesday.
“We believe February’s sales will reflect strong Presidents Day deals as well pent-up demand from sales may have been pushed out of January due to inclement weather conditions,” he explained.
What's Ahead
Buckingham is calling for February light vehicle SAAR of 17.7 million units, an 8.2 percent year-over-year (Y/Y) gain.
For investors, not all auto stocks are created equal. Amaturo recommends Buy-rated Ford Motor Company F, American Axle & Manufact. Holdings, Inc. AXL and Penske Automotive Group, Inc. PAG.
One notable exemption from the list is Neutral-rated General Motors Company GM. Buckingham is calling for General Motors to maintain flat market share over last year on a Y/Y February sales gain of 8.5 percent. For Ford, the firm is predicting a 0.4 percent market share gain on a 11.0 Y/Y sales boost in February.
Buckingham is also calling for a 10 percent Y/Y jump in China’s February auto sales.
Disclosure: The author holds no position in the stocks mentioned.
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