Hit The Gas Or Pump The Brakes With These Car Stocks

I know Tesla (NASDAQ:TSLA) has consumed a lot of my time of late as I watched the stock trade from $325 back to $300 and I will probably watch it roll on to $330 soon. A few weeks ago I wrote about how I think TSLA will hit $450 in a year, so clearly I am bullish despite what Elon Musk said about the valuation of the electric car maker.

Thing is, there are a lot more moving stocks in the auto world. Yes the Tesla story probably gets a little more ink than most, but there are other great stories out there.

In my most recent Bolan’s Blowouts, I looked at 3 auto stocks. The two that are getting “blown off the books” were the rental car companies. Hertz (HTZ) and Avis (CAR) were both profiled as they were Zacks Rank #5 (Strong Sale) and both has posted big earnings misses.

Driving Portfolio Gains

There was plenty of talk about “peak auto” around the end of last year. Sales numbers continued to impress for a few more months, but more recently we have seen a drop in auto sales numbers. There were also concerns about the credit quality of auto loan portfolios. All of this led me to two stocks that are more aligned with auto shopping and sales.

Autobytel (ABTL) is a Zacks Rank #1 (Strong Buy) and was profiled in this Zacks Rank Buy for aggressive growth investors (https://www.zacks.com/stock/news/261118/autobytel-abtl-and-childrens-place-plce-are-aggressive-growth-rank-buys?). I like the stock and the recent move in the stock as well.

A similar name is TrueCar (TRUE) which is a Zacks Rank #2 (Buy) and has a growth style score of A and a value style score of F. I like to see the divergence between value and growth as those investors are looking for different things.

Follow Brian Bolan on Twitter: @BBolan1

Recent IPO

A stock to keep your eye on is Carvana (CVNA) which promises to help car buyers purchase their next vehicle online. The stock recently held its IPO, and it wasn’t the strongest opening ever. The company sold 15M shares at $15, which was the middle of the indicated range, but then opened for trading at $13.71 and then briefly traded to $13.94. After that the stock cratered and dove down to a low of $8.14 before putting the metal to the pedal and running back over $11.

The stock doesn’t have a Zacks Rank yet as there isn’t any research on the name just yet, but look for that to change on May 23 when the quiet period ends. Look for coverage from Wells Fargo (NYSE:WFC), BofA/Merrill, Deutsche Bank (DE:DBKGn) and Citigroup (NYSE:C) among others on that day.