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4 A-Rated Auto Manufacturing Stocks to Buy in August

Stock MarketsAug 02, 2021 12:30PM ET
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© Reuters. 4 A-Rated Auto Manufacturing Stocks to Buy in August

: Increasing interest in electric vehicles (EVs), along with heightened demand for personal cars amid rising COVID-19 infections, have been driving auto manufacturers' sales lately. Furthermore, because the supply of semiconductor chips is projected to improve in the coming months, the industry is expected to soon exhibit solid growth. So, we believe auto manufacturers Volkswagen AG (OTC:VWAGY), Daimler (OTC:DDAIF), Honda Motor (HMC), and Mazda Motor (OTC:MZDAY) should deliver handsome returns in the near term. These stocks are rated A in our proprietary stock ratings system. Read on to learn more.Rebounding global demand for automobiles owing to massive economic stimulus, coupled with rising interest in electric vehicles (EVs), has been driving the performance of the auto manufacturing industry. Also, with increasing concerns over the spread of the highly contagious Delta variant of COVID-19, auto sales are expected to increase as people avoid public transport. According to Fitch Ratings, U.S. light vehicles sales are expected to hit 15.6 million in 2021, up nearly 10% from 2020. With most countries seeking to address climate change concerns over the next decade, auto manufacturers are also ramping up the production of EVs in anticipation of a continuing increase in demand.

Although the industry is facing an acute semiconductor chip shortage, the supply of semiconductors is anticipated to improve in the coming months based on measures taken by governments and businesses. Investors’ interest in the auto industry is evident in First Trust NASDAQ Global Auto Index Fund’s (CARZ) 9.6% increase over the past three months.

Given this backdrop, we think shares of auto manufacturing leaders Volkswagen (DE:VOWG_p) AG (VWAGY), Daimler AG (DE:DAIGn) (DDAIF), Honda Motor Co. Ltd (HMC), and Mazda Motor Corporation (MZDAY) could be wise bets now. Our proprietary POWR Ratings system currently has an A rating for these stocks.

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4 A-Rated Auto Manufacturing Stocks to Buy in August
 

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