Have you been to an auto dealer lately? Their lots are full of customers. My salesman could not even find an open desk to put me at. We finally had to settle on one without the hot lights. I just hate the whole car buying experience.
Nevertheless, now is a great time to buy a car. The economy is on the mend, interest rates are still relatively dirt cheap, and the automakers continue to innovate. Lithia Motors (LAD), which is headquartered in Medford, Oregon is a good proxy as to just how strong auto sales have been recently.
Lithia operates 87 car dealerships in 11 western states offering 27 brands of used cars and light trucks.
Low interest rates have driven growth throughout the auto industry in companies like Ford (F) and General Motors (GM), and this has also trickled down to the auto parts producers. In fact, Delphi Automotive (DLPH) has been one of my top-ranked stocks for the last six month.
Data from Best Stocks Now App
You can see from the chart below as to how this large-cap auto component stock has fared over the last twelve months!
Unfortunately, the horse is pretty much out of the barn on the shares of Delphi. But, I have been watching another very similar stock beginning to follow in Delphi’s tire tracks.
Illinois based Tenneco (TEN) is an auto parts company that engineers and manufactures suspensions, exhaust systems, and is developing a new line of brake pads. Tenneco manufactures products for auto companies, locomotives, trucks, and all other vehicles. Tenneco also has many after-market production companies.
This is a mid-cap company ($2.85b) with an aggressive growth risk profile, which makes it a higher risk and higher reward investment.
Mid-cap, domestic stocks continues to be one of the sweets spots in the market. That is a good start. If I can also find superior performance, good value, and a healthy stock chart, I may be interested.
Let’s first take a look at the stock’s performance. I like to compare the stocks long-term, intermediate term, and short-term performance with that of the S&P 500:
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