Auto Stocks: Cheap or Value Traps?
Welcome to Episode #14 of the Value Investor Podcast
Every week, Zacks value stock strategist and the Editor of Zacks Value Investor portfolio service, Tracey Ryniec, talks about all things happening in the value stock universe, including her top stock picks.
This week, Tracey discusses the auto stocks which all look really cheap. Most of them are trading with single digit forward P/Es. Is this a dream come true for value investors or is it a value trap?
Remember, a value trap is a company that appears to be cheap by its fundamentals but which really isn’t because earnings are on the decline.
Tracey dug into the auto stocks to determine if they really are just cheap stocks or if value investors are walking into a trap.
5 Auto Stocks: Cheap or Value Traps?
1. General Motors (GM) has a forward P/E of just 5.4. 5.4! Is now the time to buy?
2. Ford (F) is almost as cheap as GM. It has a forward P/E of 6.5. What are investors missing?
3. Magna International (MGA) makes auto chassis, exterior, vision systems, and roofs. It trades with a forward P/E of 8. Are the auto parts companies in a different place than the auto makers?
4. Borg Warner (BWA) has a forward P/E of 10.5. It makes combustion systems, starters and alternators.
5. Lear Corporation (LEA) makes seating and electrical systems for the auto industry. It has a forward P/E of 8.7. Are rising earnings estimates a game changer?
Find out what Tracey thinks about these value stocks on this week’s podcast.
Learn How to Tell if a Stock is Cheap or a Value Trap
Tracey gives you the low down on the difference between cheap stocks and value traps in this podcast. Check it out.
Want more insights from Tracey?
Check out her weekly Value Investor service to receive more in-depth analysis on value companies and see which stocks she thinks are the best bargains now. Click here to learn more>>
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FORD MOTOR CO (F): Free Stock Analysis Report
BORG WARNER INC (BWA): Free Stock Analysis Report
MAGNA INTL CL A (MGA): Free Stock Analysis Report
LEAR CORPORATN (LEA): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
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