Auto Industry Stock Winners Losers And 2017 Bets – Forbes

Posted: Friday, December 30, 2016

Cars, SUVs and trucks everywhere, but you have to be a stock picker to invest wisely. Photographer: Sean Proctor/Bloomberg

They are everywhere you look. Giant, metal things on wheels, carrying people, luggage, horses, bikes…you name it. They are highly computerized, so much so that many are talking about them driving themselves soon. Load them up with a family, and you can go from Detroit to New York in about nine hours, or from New York to Los Angeles in three or four days.

And almost everybody seems to have one. Consumers pay anywhere from $16,000 to $100,000 or more for a new one. Companies are selling more than 17 million a year to the public this year. That is the U.S. light vehicle market – cars, SUVs and pickups – and investors are not loving the shares of most of these companies, but for a couple of exceptions.

Why? You’d think all that revenue in a surging consumer economy would have big-shot institutional investors more impressed. Nope.

Let’s take a look at 2016 investing in the auto sector, and look ahead a little to the next year.

The S&P is up about 10% in 2016, but GM is only up 3%, while Ford is down 12%, FCA is down 3%, Toyota is down 3%, and even the high-flying Tesla is down 11%. The supplier side of the industry is full of laggards too. Borg Warner is down 8%. Goodyear and American Axle are flat. Autoliv is down about 10%. Delphi is down 22%. Visteon is down about 30%.

There are some bright spots, but you would have to have picked them out of the dullards. Lear and Magna Automotive are both up about 9%, but that’s even with the S&P.

If you want some high flyers, you really had to be smart and lucky in the auto sector. Johnson Controls is up 33% on the year. And thought it is traded as a tech/chip company, Nvidia is a significant automotive supplier in the telematics and connected car realm, and is up 233%.

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