Last year was big year for automakers.
And while we heard all about Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) and their banner years, there wasn’t a lot press talking up what I consider the top automakers on the planet right now — Tata Motors Limited (ADR) (NYSE:TTM), Toyota Motor Corp (NYSE:TM) and Fiat Chrysler Automobiles NV (NYSE:FCAU).
There’s great expectation that cheap oil and low interest rates will be a boon for global demand for cars and trucks. Plus, dealerships are offering seven-year loans to help consumers leverage up the luxury while keeping monthly payments reasonable.
The loans seem to be paying off. Americans’ average new-car loan payment hit a record $482 in Q4 2014, according to Experian Automotive.
What’s more, the Experian report shows that the amount borrowed to buy a new car in the Q4 hit a record $28,381, a $582 increase from the previous quarter. It’s estimated buyers were plunking down an average 15% on downpayments, which puts the average sale price around $33,000.
That’s a pretty healthy price point, and there’s a good chance this trend will continue.
The three carmakers we’re featuring all have the best momentum in the U.S. market and the global markets at this point. All three have very little institutional exposure, which can be a double-edged sword, as far as volatility goes, but in this kind of bullish market, it keeps their upsides slightly more dynamic. Additionally, two of them kick off nice dividends to boot.
Let’s take a look:
Tata Motors Limited (ADR) (NYSE:TTM)
Tata Motors Limited (ADR) (NYSE:TTM) is easily one of the most underrated global industrial companies in the world.
First, TTM sits in one of the largest markets in the world, with one of the most visible brands in the market. Then, Tata Motors buys classic British badges Land Rover and Jaguar Cars Limited to cater to upscale markets around the world. Finally, TTM builds quality and reliability into all its models, which wasn’t exactly the case historically.
And Tata Motors makes a lot of money doing it.
Investors have fared well over the past few years as well, now that U.S. investors are taking notice. TTM is up almost 40% in the past year and almost 160% in the past five years. That’s some strong, sustained growth.
Rating agencies are boosting their ratings on TTM stock for the coming quarters, and while its 0.33% dividend doesn’t exactly make it an income stock, Tata Motors’ growth has been and will continue to be the compelling story.
Toyota Motor Corp (NYSE:TM)
March is coming in like a lion for Toyota Motor Corp (NYSE:TM): Kelley Blue Book and Edmunds have forecast double-digit unit sales gains for Toyota in March. Toyota sales are expected to rise 13% by Kelley and 16% by Edmunds.
Add to that, in early February analysts estimated the short-term price target on TM stock was 149 — Toyota stock is trading in the low $130s now.
The big buzz is about TM’s new fuel cell vehicle (FCV) the Mirai, which is supposed to be a competitor with Tesla Motors Inc‘s (NASDAQ:TSLA) electric cars. Toyota is planning making 700 of the cars this year — all hand assembled — but it already has orders in Japan for 1,500 of them.
The challenge in the U.S. market will be the fact that there aren’t many hydrogen-charging stations for FCVs outside of California, but that won’t stop collectors and early adopters in the U.S. and other markets.
Aside from rising growth prospects, TM also sports an attractive dividend around 2.3% at this point, and Japanese stocks are world-renowned for maintaining their dividends, come what may.
Fiat Chrysler Automobiles NV (NYSE:FCAU)
Guess how much Fiat Chrysler Automobiles NV (NYSE:FCAU) has gained since its debut in October 2014?
Did you say almost 75%?
It’s hard to believe this odd blend of Italian style and U.S. muscle has figured out a way to make both work.
Yet, most of the recent gains have to do with the U.S.-muscle aspect of the group. The Chrysler and Jeep badges were on fire in 2014 and continue that trend into 2015.
Chrysler sales increased 13% in February with sales of the Chrysler 200 leading the pack, up 31%. Sales of the Ram pickup truck were up 7%.
Jeep sales were up 21% for the month. Sales of the Jeep Patriot were up 59%, the compact SUVs best sales month ever and largest percentage increase of any Jeep brand model.
Sales of the Dodge Dart were up 52%, while Fiat brands also posted strong sales, but not as robust as U.S. brands.
The point is, that it looks like FCAU has worked out all the bugs from the merger and have found the right formula. Fiat Chrysler has a diverse and interesting line of cars and trucks to sell into this boom time.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
