Top Auto Stock News From Fiat And Volkswagen

Switching up styles today and giving you a quick auto stock roundup. Not because I couldn’t find one story to run with and make fun of, but because there was so much ridiculousness this week I simply had to do it.

Fiat Chrysler (NYSE:FCAU) had to recall 812,000 Jeep vehicles because of a faulty shifter. And when they say faulty, it’s not the arrow, it’s the Indian. User error. The shifter works just fine but the problem is, Jeep owners can’t figure out how to use it properly. The design is a little wonky, and the shifter doesn’t stay in slot for Park or Drive or Reverse like a normal automatic. Instead it always bounces back to the middle. Which, sounds like a horrible idea to me.

These people are buying automatics. That means, they don’t want to think when they drive. Like, I don’t want to think about the fact I’m using an off-road capable SUV to drop off little Tina ballet rehearsal. Why would they want to focus on what gear they are in? Although, off-road capability is a great idea if you have to navigate the potholes here in Chicago.

Fiat is also working on a partnership with Google (NASDAQ:GOOGL) to build a driverless fleet of cars. Their first product would be a driverless Chrysler Pacifica minivan. I can say with 100% confidence that most Pacifica’s I’ve seen on the road, already are driverless.

The best news has got to be from Volkswagen (OTC:VLKAY) . You know, whoops we may have lied a little about our emissions, Volkswagen. After the Dieselgate scandal that cost the company nearly $18 billion, CEO Martin Winterkorn resigned. Today we found out the details of his pay. Not only did he get a $6.5 million performance bonus in a year that the company lost $4.5 billion, but he also got a severance package worth $10.2 million. Which begs the question…WHAT ABOUT DAVE?! I’m pretty sure I can lose your company $4.5 billion, and I know I can use $16 million. I got habits, Champagne tastes and, I love to light money on fire.

The foreign auto industry is in the Bottom 28% of our Zacks Industry Rank. Volkswagen may seem like a good turnaround story. The type of stock I’d add to my Home Run Investor service where I look for stocks that can potentially double. However, Volkswagen is scraping barrel bottom at a Zacks Rank #5 (Strong Sell), Fiat Chrysler is a Zacks Rank #1 (Strong Buy), and it’s not because of the Pacifica. Two analysts have increased their earnings estimates for the current year and next year. The bullish sentiment has jacked up the Zacks Consensus Estimate from $1.52 to $1.76 for the current year and up from $1.92 to $2.17 for the next year. Fiat is also coming off the heels of a big earnings beat with EPS coming in at 38 cents versus 21 cents.