Since Memorial Day weekend is the unofficial start of summer, millions of Americans are hopping into their vehicles for the first of many fun road trips.
Drivers who are hesitant to take to the highways in an old family jalopy that’s seen better days will be bombarded with holiday sales and limited-time offers on a new vehicle.
Likewise, investors looking to cash in on the trend of stronger auto sales are looking to this sector for solid returns — and in some cases, income. But just as car buyers who shop around and compare features and prices often get better deals on the vehicle of their dreams, the same is true for investors in auto stocks.
Despite a sluggish start to the year due to the long, tough winter, Edmunds.com forecasts 16.2 million new vehicles will be sold in the U.S. in 2014. And that’s good news for automakers and their investors.
But in a market where pent-up vehicle demand is making the sector’s performance look shiny, not all auto stocks make the grade. Here we offer report cards for five auto stocks, breaking down which ones make the grade — and which ones that might need summer school.