3 Auto Stocks That Should Be on Every Investor’s Radar This Fall


  • The best auto stocks to buy are those with tremendous opportunities.
  • Magna (MGA): MGA is benefiting from the electrification trend.
  • Nikola (NKLA): Nikola’s fuel-cell trucks look poised to be very popular.
  • BlackBerry (BB): BB is trying to break into the car software business.
auto stocks to buy - 3 Auto Stocks That Should Be on Every Investor’s Radar This Fall

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Right now, when the business-news media discusses auto stocks, it focuses on the strike by the United Auto Workers Union. Hopefully that issue will be resolved relatively soon. For long-term investors, electrification, autonomous driving and software subscriptions are much more pertinent and interesting. The best auto stocks to buy at this point are those that can benefit a great deal from these potentially lucrative trends, but are trading at relatively low valuations. These three auto stocks to buy are among the best positioned names to do exactly that, making them very attractive at this point.

Magna (MGA)

A Magna International (MGA) sign is on the front of a Magna building in Ontario, Canada.
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Encouragingly, Canadian auto parts maker Magna (NYSE:MGA) on Sept. 7 increased its revenue guidance for 2025 to be $46.7 to $49.2 billion versus its prior outlook of $44.7 to $47.2 billion. The hike was due primarily to the success of company’s Power & Vision unit, whose top line is now expected to come in at $16.8 to $17.4 billion, well above the prior outlook of $14.8 to $15.4 billion.

The firm’s Power and Vision unit includes parts such as powertrain systems, electronics systems, mirrors and lighting. As vehicles worldwide become much more electrified, the growth of Magna’s Power and Vision business looks poised to accelerate significantly going forward.

Also noteworthy is that the company announced in May that it had obtained a deal to supply its eDrive system, called eDS Mid, to a large high-end European automaker. Magna describes the eDS Mid as a high-voltage system for electric AWD (all wheel drive). The large European automaker’s decision to buy the offering bodes well for Magna’s ability to sell similar systems to other automakers, enabling it to thrive during the electrification era.

MGA stock is changing hands at a low forward price-to-earnings ratio of 8.5x. MAga’s huge growth opportunities and low valuation make it one of the best auto stocks to buy.

Nikola (NKLA)

Nikola (NKLA) Tre BEV electric truck at the Hannover IAA Transportation Motor Show. Germany
Source: VanderWolf Images / Shutterstock.com

According to Nikola (NASDAQ:NKLA) CEO Steve Girsky, the truck maker’s fuel-cell trucks, which are currently undergoing tests, are traveling 900 miles per day. That’s a very impressive achievement for zero-emission vehicles, and the metric reinforces my view that Nikola’s fuel-cell trucks, which are powered by hydrogen, are well-positioned to gain popularity.

Girsky noted that the company has started demonstrating the trucks to one potential customer and will soon start doing so with other potential customers in the next few months. As a result, by the end if the year, I believe that Nikola could start announcing deals to sell a sizeable number of its fuel-cell trucks. That should be a positive catalyst for NKLA stock. And in fact, Girsky reported that the automaker had already received over 210 non-binding orders for the fuel cell truck. The fuel cell vehicles have potential to become very popular in California thanks to a sizable rebate the state is offering companies with small fleets.

I believe that the current $1 billion market capitalization of NKLA stock far undervalues its long-term potential.

BlackBerry (BB)

An image of the interior of a smart car; finger pointing to screen showing different AV controls
Source: Zapp2Photo/Shutterstock

I know that most investors see BlackBerry (NYSE:BB) as software company. However, BB has a stake in vehicles too. It has made a huge deal that will likely bring its software and app store for cars to millions of people. Specifically, BB announced that the giant Taiwan-based manufacturer, Foxconn, would develop an electric vehicle that incorporates BB technology.

BlackBerry’s highly secure operating system, QNX, runs the software in hundreds of millions of vehicles. And BlackBerry has developed a great deal of other, impressive software for vehicles. This includes its app store, which it has developed in partnership with Amazon (NASDAQ:AMZN).

Given these points, I believe that BB could reach $20 to $30 per share, versus its current price of around $5.15. Alternatively, BlackBerry stock can reach even greater heights in several years.

On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2023/09/3-auto-stocks-that-should-be-on-every-investors-radar-this-fall/.

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