On Wednesday, we received news that February U.S. auto sales drove higher. Total industry sales rose 27% to their highest level since the August 2009, good news for companies and options trading investors. That August 2009 number reflects the artificial increase from the government’s “cash for clunkers” program. So, if we discount that unusual monthly sales bump, we see that the February 2011 sales figure of 13.44 million units sold last month (at a seasonally adjusted annual rate) was the best month for car sales since August 2008. Truck sales also were strong in February, with a 31.7% increase over last year.
The robust numbers were indeed encouraging for automaker stocks, although the news comes as oil prices surge over $100 a barrel. Yet despite this rise, and the concomitant rise in U.S. fuel prices, February sales figures should be read as an undoubtedly bullish sign going forward for auto stocks.
Options players who can think beyond the current price at the pump could likely prosper with the following three pedal-to-the-metal auto stock options.
General Motors (NYSE: GM). The former government protectorate is back to doing what it does best, and that’s selling a lot of automobiles. Last week the company reported a $4.7 billion 2010 profit, and in February the former bankrupt entity grew its U.S. market share by 2.7 points to 20.8%. The numbers certainly suggest that GM is back in favor with buyers.
Option players who want to take advantage of this trend should look at the GM APR 36 Call.
Ford Motor (NYSE: F). The company saw increased consumer demand grow for its line of fuel-efficient vehicles, and that helped the automaker’s total February sales rise 14% over the same period a year ago. Ford’s U.S. market share actually slid 1.9 points to 15.7%. Yet given that Ford has perhaps the best lineup of fuel efficient vehicles around, a continued spike in oil prices may actually be a boom for Ford sales.
Aggressive options traders may want to start up the F APR 16 Call.
Toyota Motor Corp. (NYSE: TM). The Japanese auto giant enjoyed a 42% jump in February sales over its unusually depressed 2010 levels. It was a year ago that Toyota was hit with a series of mass recalls. Last month, the company’s U.S. market share rose 1.5 points to 14.3%. Just last week, Toyota recalled another 2.3 million vehicles in order to fix floor mat and carpet defects that could jam the accelerator.
Options players who suspect that this latest recall won’t put the brakes on the stock going forward should check out the TM JUL 105 Call.
Disclosure: No current positions
