Investing in the Best Car Stocks

As the economy improves, automakers and their suppliers stand to gain hugely from rising consumer confidence levels. Auto industry profits tend to fluctuate cyclically with consumer optimism.

Ferrari NV (RACE) stands out among car stocks as one of the best investments for both its exceptional margins and luxury status – providing recession protection as well as growth potential. These stocks are among the very best investment options available, vehicles for which you do not really need to worry about what to do after accidents.

Ferrari

Investing in auto sector stocks can be an exciting way to access dynamic market potential. Policies like India’s PLI scheme and an increased focus on electric vehicles (EVs) could see an uptick in demand for these companies’ products, leading to promising performance for their stock prices.

Ferrari stands apart from legacy car manufacturers like GM and Ford thanks to its 18% margins, premium valuation, recession protection features, ultra-luxury offerings and long-term returns that provide investors with stable returns over time.

Visteon (NASDAQ:VC), which provides technology solutions for combustion, hybrid, and electric vehicles is another worthy pick in 2019. Their partnership with leading OEMs makes an impressionive statement about their capabilities; most recently their financials showcased strong base sales growth of 9 percent.

General Motors

General Motors (GM, 0.19%) remains one of the world’s premier car companies despite recent volatility. Indeed, Detroit-based General Motors may soon emerge as an authority on electric vehicle (EVs).

GM currently accounts for less than 3% of sales and profits from electric vehicle (EV) sales and profits; however, its management has ambitious plans to significantly expand this segment. Furthermore, GM has been investing in autonomous driving efforts with Cruise competing against Alphabet’s (GOOG, GOOGL) Waymo in developing robotaxis.

Investors should note that General Motors (GM) stock is highly cyclical and susceptible to external factors such as interest rates, gas prices and supply chains. Therefore, only consider investing if you plan on holding onto the stock for at least the long haul.

Ford

Ford offers investors interested in investing in the car industry a great opportunity. Revenue has seen significant increases this year and may help beat back against macro headwinds that have hit other auto manufacturers.

Ford’s commitment to electric vehicle sales is also an integral component of its business, as evidenced by recent months’ increase in EV sales. Ford expects this growth trend to continue as more EV models enter production.

BorgWarner provides technology solutions for combustion engines, hybrid and electric vehicle batteries. Revenue has seen significant growth over the last five years making BorgWarner an attractive long-term investment choice with its diverse offering suited for long-term automotive investments and offering 2.4% dividend yields to boot!

BorgWarner

BorgWarner has invested heavily in electric vehicles (EVs), and it is starting to pay dividends. They produce electrical products like charge inlets and various sensors for these EVs as well as motors and power transmission systems to power them.

BorgWarner’s recent acquisitions of AKASOL and Santroll have strengthened its light vehicle EV power electronics capabilities, and while total auto industry volumes may not increase as we switch over to electric vehicles, their exposure should lead to long-term gains for BorgWarner.

BorgWarner’s earnings may be stagnating, but its manufacturing skills and reputation will allow it to stay relevant for some time yet. Therefore, now is an excellent time to purchase their stock as it trades below its intrinsic value; I anticipate an upswing of 20-40% within two or three years making BorgWarner one of my recommended car stocks to purchase now.