Stocks

3 Automotive Stocks That Could Snap Back After Coronavirus

The automotive sector faces a lot of uncertainty in the next few years. It’s far from certain whether a post-COVID-19 world will usher in a gradual recovery in the auto sector, or a protracted downturn. So fir investors, it makes sense to prepare for a range of scenarios.

However, I think three automotive stocks have the potential to snap back after the coronavirus pandemic is contained. Here’s why.

Three scenarios, three automotive stocks

  1. For an initial recovery followed by a recession, auto-parts O’Reilly Automotive (NASDAQ:ORLY) is an attractive stock.
  2. For an initial recovery followed by a period of flat growth, you might favor automotive-repair toolmaker Snap-on (NYSE:SNA).
  3. If the economic recovery is followed by a period of growth that includes a rise in light-vehicle sales, rearview-mirror manufacturer Gentex (NASDAQ:GNTX) offers significant upside potential.

1. O’Reilly Automotive

Probably the two most important factors determining revenue growth at auto-parts retailers are

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Automotive Stocks Gear Up To Fight COVID-19

Major automotive and auto component manufacturers have seen their stock prices decline by an average of over -30% year-to-date, due to the Coronavirus pandemic. While General Motors stock is down by about -41% year-to-date, Ford is down by -47%. However, Tesla has bucked the trend, rising 68%. The health crisis has meant people really don’t need to drive much right now, and not many are buying new cars either. Irrespective of what local and country governments prescribe or guide, we don’t believe this is likely to change in a hurry. Discretionary spending is likely to drop as the economy slips into a recession, impacting auto sales.

Though steep declines have happened, more pain and declines are possible in the coming weeks as

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