Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Secret to Unlocking Huge Auto-Tech Stocks Profits

Companies / US Auto's Jan 28, 2014 - 01:26 PM GMT

By: Money_Morning


Michael A. Robinson writes: As a tech investor, I pay a lot of attention to the key trends reshaping our world and setting us up for massive gains.

I've also found that sometimes you can boil down great investment opportunities into a number. In this case its 11.4...the average age of a car on U.S. roads today.

Compared with the new connected car, that's like driving something out of the Flintstones.

See, the connected car is both web and Bluetooth enabled. It's also loaded with complex sensors, sophisticated software, and advanced semiconductors.

This embedded tech ecosystem is one of the big reasons why the industry sold some 15.6 million vehicles last year, in no small part because drivers want their smartphones and cars to stay connected to each other.

Here's the thing. As much as I believe in the connected car, there are many, diverse tech-related ways to cash in on the millions of new vehicles rolling off the assembly lines this year.

The secret to finding the best auto-tech plays is to understand foremost their positioning in this booming sector.

Some companies have arisen on the back of auto-technology, but lack the fundamentals to last...

Others have names as old as the industry itself, yet their technology outpaces much newer, and ostensibly higher-tech, companies...

And then there are some right in-between.

Today, I'll show you three very diverse companies...

Yet for their different niches, they fit our one criterion: Perfectly positioned in the auto-tech sector to deliver market-crushing results...

Driving the Web for Record Sales

From a high-tech standpoint, AutoNation Inc. (NYSE: AN) ranks as an intriguing hybrid play.

To be sure, it is heavily rooted in the physical world. After all, the company operates some 267 auto dealerships around the United States, making it the industry's largest new-car retailer.

But its savvy use of the Web presents the company to potential new clients as more of an Internet buying service than a standard auto dealer.

For instance, when I recently logged onto the company's website, it knew automatically that I am located in Oakland, Calif. Much like you'd find at an independent broker, AutoNation's website prompts you to search for a vehicle by type, make, and model.

The home page also tells visitors it provides "hassle-free" dealing and offers to appraise their vehicles and give them a guaranteed trade-in value.

In this regard, the first impression you get is that of a company using the web to make car shopping much easier, rather than promoting any existing dealer or nameplate.

Its sophisticated use of the web is one of the reasons why the company continues to register huge sales gains. Both last November and December, the company had the highest sales for each of those months since 2001.

For last year's third period, AutoNation reported its fourth consecutive record earnings per share from continuing operations, a 14% increase from the previous year to $0.75. Total sales also increased 14% in the quarter to $4.5 billion.

With a market cap of $5.9 billion, the stock trades at $48 a share with a forward PE of 14.5. It's priced at only .35 times sales and has a PEG ratio of just .65, well below the "fair price" ratio of 1.

The Sweet Sound of Profits

To say that I've followed the development of one of the nation's leading car audio firms for more than 30 years is no exaggeration.

Fact is, the first stereo I bought out of college was made by Harman Kardin. I loved that stereo so much it got me kicked out of a couple of apartments.

And as a long-time audio enthusiast, I've tracked the company through its many changes over the years. Expanding through a combination of organic growth and mergers, the company's nameplates also include JBL and Infinity, two highly respected global brands.

With all that momentum behind it, Harman now sells sophisticated audio components and systems to most of the world's major car makers, including BMW, GM, Subaru, Toyota, and Volvo.

More to the point, Harman International Industries Inc. (NYSE: HAR) has moved beyond its audio roots and now ranks as a bona fide tech powerhouse.

In fact, over the last several years, Harman has ramped up its offerings of high-tech auto infotainment systems that provide navigation, multi-media, and audio control from the dashboard.

These are not only an integral part of the connected car; they are becoming big business for Harman. In its Fiscal 2013, Harman received new infotainment awards totaling $1.8 billion, compared with $1.2 billion for car audio.

It's a powerful one-two punch. Harman says that some 25 million vehicles on the road today feature its audio-infotainment systems that also integrate GPS and navigation.

Actually, Harman gives investors exposure beyond the new-car boom. The company has expanded into accessories that support the mobile revolution and also ranks as a leader in the professional audio-video market.

With a market cap of $6 billion, the stock trades at roughly $89 a share with a forward PE of about 17, in line with the overall market. In its first fiscal quarter 2014 ended Sept. 30 sales rose 17% to nearly $1.2 billion as non-GAAP earnings per share climbed 21% to $0.95.

Tweaking Materials and Fuel Economy

This sure ain't your granddad's Ford Motor Co. (NYSE: F).

Indeed, the firm is making huge sales gains because it has embraced a wide range of tech systems.

Ford has unveiled a breakthrough hybrid car and made steady advances in safety. With its EcoBoost engines, the firm is ahead of the curve on fuel economy.

And it's even tweaking materials science to produce a novel truck...

Ford recently unveiled a new version of its popular pickup, the F-150. To boost fuel economy while maintaining power, Ford decided to make the body and load bed almost completely of aluminum, marking the first high-volume vehicle to do so.

That's just the beginning...

Earlier this week, the Detroit-area automaker announced a new partnership with MIT and Stanford to develop a fully autonomous car by 2025. That effort builds on Ford's status as a leader in tech integration.

Its SYNC in-dash infotainment system is among the most advanced of any mass-market auto firm. Internal research shows it factors in the decision for 70% of buyers who go with Ford over a competing brand.

And Ford's C-MAX Hybrid is no slouch. With its sleek design, the model has become the darling of mass-market electrics. Ford quadrupled its slice of the U.S. electric-vehicle market nationally in the past year to a 16% share.

All of which translates into great sales figures. For 2013, Ford sold 2.5 million vehicles in the U.S, a 14% increase from the year before. The company also reported a 14% sales increase in Europe, and a stunning 49% increase in China.

With a market cap of $64 billion, the stock trades at around $16.40 a share with a forward PE of just 11. The company has a 28% return on equity and a PEG ratio of .89, with anything below 1 considered a discount.

The one thing that makes all three of these stocks great investments in the auto boom is that the firms involved fully grasp that cars are today as much about high tech as they are transportation. And they understand perfectly how to position themselves.

And in the next few years, this trend will only accelerate, giving each of these three even more chances to rack up new sales and profits for investors...

Source :

Money Morning/The Money Map Report

©2014 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email:

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a finan

cial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in