Ferrari (NYSE:RACE) Seen as Top Auto Stock in 2019

Ferrari (NYSE:RACE) Seen as Top Auto Stock in 2019

$RACE, $PAG, $GM

  • Ferrari is an auto stock to watch in Y 2019 as the iconic Italian manufacturer plans to expand its production over the next 7 years
  • Ferrari and Penske are on the top auto stocks to buy in the New Year, Consumer Edge Research’s Jamie Albertine said on TV Wednesday.

The automotive research annalist Jamie Albertine’s recommendation on Penske (NYSE:PAG) follows his November call that higher used-car sales could extend into Y 2019 “in a major way.”

Carrying a high return on invested capital, or ROIC, Penske Automotive Group has begun moving into the used car retail business.

The Bloomfield Hills, Michigan-based company is looking to attract customers seeking value on the used car market, allowing Penske to compete with platforms like Carmax and Carvana, which Mr. Albertine said last month has taken advantage of an industry under pressure from tariffs and changing consumer tastes.

“Penske’s getting into standalone used sales wit a lot more force,” he said adding that he has seen a “pivot” among consumers “from new- to late-model used vehicles as the off-lease supply comes back to market.”

Penske shares finished at 40.05 Thursday, the stock is down more than 16% YTD.

Italian luxury sports car manufacturer Ferrari’s (NYSE:RACE) stock is another one to watch as the company ramps up production from the 9,000 units it makes annually to North of 14,000 a year. The company is planning to boost car production by as much as 55% over the next 7 years.

From a brand perspective, Ferrari has 1 of the most protected customer-loyal brands in the history of luxury products.

“So, again, focus on quality there, but also some Key EBIT margin expansion [and] production expansion, over the … near to medium term,” Mr. Albertine said, referring to earnings before interest and taxes, a corporate profitability measure.

Ferrari bounced from a 52-wk low Wednesday morning and gained more than 2% intra-day. The stock is about 4.5% from the start of Y 2018, finishing Thursday at 99.75.

Mr. Albertine also mentioned General Motors (NYSE:GM) as a stock to watch as the company makes progress in the autonomous vehicle sector with Cruise Automation. Shares of the embattled automaker have lost about 17% for Y 2018 finishing at 36.96 Thursday.

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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