Are These Automotive Stocks On Your October Watchlist?
Automotive stocks can refer to a variety of different company types. Some of these company types include automobile, motorcycle, parts, and more. The automotive sector has performed rather negatively due to the effects of the coronavirus pandemic. The economic crisis caused many factories to slow or halt production. This resulted in dealerships making less money, and people not buying very many cars. But recently, things have started to brighten up for top automotive stocks in the stock market.
First of all, electric car stocks seem to still be booming in 2020. You’ve seen how companies like Tesla Inc. (TSLA Stock Report) and NIO Limited (NIO Stock Report) have performed well throughout the year. But for regular automotive stocks, it has been rather volatile. Some automotive stocks went up as car production started up once again. Sales are starting to increase, and production is opening back up for many companies. Additionally, automotive companies are rolling out new products still, like Nissan revealing its new Z car. So with advancements still being made and sales on the rise, let’s look at three automotive stocks to watch in Q4 2020.
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Top Automotive Stocks To Watch In October 2020: RumbleON Inc.
The first automotive stock on this list is RumbleON Inc. (RMBL Stock Report). RumbleON is an e-commerce website for consumers and dealers to buy, sell, and trade recreational vehicles. Many of its items include Harley-Davidson motorcycles and more. RumbleON also provides financing services to customers. After a series of disappointing earnings reports, RMBL stock went from trading at over a thousand dollars in 2019, to under $8 in May of 2020. But since May, RMBL stock has increased a bit from that low number. On May 19th, RMBL stock was at $193, and then it fell to $7.95 a share the following day. But since then, RMBL stock price has gone back up to $27 a share on average. While this is not anywhere near its former glory, it shows that this automotive stock is still increasing in the share price.
In its second-quarter reports on August 14th, it achieved an earnings-per-share profit of $0.47 versus $11.69 loss per share year over year. Its gross profit per vehicle grew by 74%. RumbleON claims that Q3 is showing the strongest demand in the company’s history.
The CEO of the company, Marshall Chesrown said, “We have demonstrated solid progress on our march to profitability the past several quarters and I am pleased to report that we generated double-digit gross margin as a percent of sales and $1.0 million in net income in the quarter, despite the challenging macroeconomic backdrop.”
It will be interesting to see if its Q3 results will help its stock price. The company has not yet announced the date in which it will release these results, so only time will tell.
Top Automotive Stocks To Watch In October 2020: Cars.com Inc.
The second automotive stock to watch is Cars.com Inc. (CARS Stock Report) due to its potential in the market. Cars.com is the second-largest automotive classified site in the world as of 2020. Its website allows you to list vehicles for sale on its website whether it’s a private party or a dealership. The pandemic caused CARS stock to fall drastically. Before the pandemic began, CARS stock price was at $12 a share on average. Then when March came around, CARS stock fell to $3 a share at its low point. CARS stock has not managed to recover yet, but the company does have potential.
In its second quarter results released on July 30th, its revenue was down $46.2 million aka 31%. It claims this is due to the “invoice credits of 50% in April 2020, and 30% in May and June that we provided to our marketplace customers”. But its monthly unique visitors was up 6% year over year to 22.8 million. Its traffic of 144 million was up 10% over the previous year as well. So while revenue is down, it is seeing some positives for its website.
The CEO of the company, Alex Vetter said, “Although business conditions remain uncertain, we are confident in the demand for cars as a preferred mode of transport, with new and used car sales bouncing back sequentially during the quarter. This trend is likely to continue with the Centers for Disease Control’s recent advisory recommending private car use as a healthier alternative to ride-sharing and mass transit.”
This positive outlook is what places CARS stock on this list of automotive stocks to watch.
Top Automotive Stocks To Watch In October 2020: Geely Automotive Holdings Limited
Last on this list of automotive stocks is Geely Automotive Holdings Limited (GELYY Stock Report). Geely is a multinational automotive company that is based in China. It owns many car brands such as Lotus, Volvo, and Polestar. Since its conception, it has grown to be a mass automotive holdings company. Another automotive company of which was badly affected by the pandemic. GELYY stock dropped from $41 a share on average before the pandemic, to $26 a share on average at its low in March. That was a 36% decrease that costed investors, all caused by the stock market crash.
In recent news, Geely announced it had completed 38% of its annual sales target in the first half of the year. In June the company sold more than 110,000 new vehicles, a 21% increase year over year. This was a 1% month to month increase for the company as well. The end result of this good news? Well, GELYY stock price has managed to make a recovery. As of September 28th, it currently sits at $39 a share but has reached above its original $41 a share from January as well. In July, GELYY stock even reached $47 a share at one point.
The CEO of the company stated that demand for its Volvo brand has not diminished despite COVID-19 spikes in certain places. In 2019, Volvo reached its sixth annual sales record in a row of more than 700,000 cars. The company seems to be rebounding quite well despite its rough start this year. That is why GELYY stock is the final automotive stock to watch on this list.
