After plunging the most in the second quarter since the Great Recession, the U.S. auto industry gathered momentum in the third quarter, with sales rebounding from coronavirus-led lows and buyers returning to showrooms. Sales growth for September marked the first monthly rise since February. Unless there is a spike in coronavirus cases, which will trigger another round of lockdown and send vehicle deliveries into a tailspin, auto sales in the United States are likely to gain traction going forward. Increasing consumer confidence, declining unemployment rate and Fed’s efforts to support the economy bode well for the auto industry, which is highly cyclical in nature.
Amid the improving landscape, let’s take a look at how the Big 3 automakers namely General Motors GM, Ford F and Fiat Chrysler FCAU are currently faring. General Motors, Ford and Fiat Chrysler are three of the oldest auto firms dated 1908, 1903 and 1925, respectively. While relatively new auto firms including Tesla TSLA are surely beefing up competition, especially in the electric vehicle space, these three legacy automakers have certainly stood the test of time and remain trusted picks for investors and consumers alike. While Fiat Chrysler currently sports a Zacks Rank #1 (Strong Buy), General Motors and Ford carry a Zacks Rank #2 (Buy) and 3 (Hold), respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
Before we delve deeper, let’s take a look at how these companies fared at the bourses so far this year. All the three stocks have declined and underperformed the industry’s rally of 130%. While General Motors and Fiat Chrysler have dropped around 15%, Ford lost nearly 24% of its value in the said period.
Let’s compare the stocks on certain parameters to give investors a better insight and find out which of