Nov 30, 2023

This story originally appeared on StockNews The auto industry is flourishing thanks to the growing demand for new vehicles, the rapid shift to electric and hybrid vehicles worldwide, and numerous technological advancements. Hence, fundamentally sound auto stocks Volvo (VLVLY), Visteon (VC), and Rush Enterprises (RUSHA) could be ideal buys for substantial gains. Keep reading…. With sustained demand for new vehicles, a growing global transition to electric vehicles (EVs), the rapid adoption of digital technology, and the introduction of e-commerce platforms, the automotive industry is well-positioned for significant growth in the long term. Given the industry tailwinds, it could be wise to invest in robust auto stocks AB Volvo (publ) ( VLVLY ), Visteon Corporation ( VC ), and Rush Enterprises, Inc. ( RUSHA ) for potential gains this month. Despite UAW labor strikes, U.S. new vehicle sales of 1.21 million units for October 2023 represented a 2% increase from a year ago in October 2022. Light vehicle seasonally adjusted annualized sales (SAAR) for the month were 15.64 million units, compared to 14.74 million units a year earlier. The growing transition to electric vehicles (EVs) around the globe, supported by government initiatives, including ambitious zero-emissions targets, vehicle tax incentives and subsidies, and affordable options, is transforming the auto industry. Electric car markets are witnessing exponential growth as sales exceeded 10 million last year. The share of electric cars in total sales has more than tripled in the past three years, from nearly 4% in 2020 to 14% in 2022. Further, EV sales are anticipated to reach 14 million by the end of 2023 , representing an increase of 35% year-over-year. As a result, electric cars could account for approximately 18% of total car sales through this year. As per Atlas Public Policy, EV sales are expected to hit a record 9% of all passenger vehicles in the U.S. in 2023, compared to 7.3% of new car sales last year. The growing demand for vehicles globally, the rising demand for electric and hybrid vehicles, and the surge in e-commerce platforms are further propelling the growth of the auto parts market. Moreover, the increasing trend of automotive customization will likely be one of the critical drivers for the market in the near future. The global auto parts market is projected to a value of $1.10 trillion by 2030, expanding at a CAGR of 6.8% during the forecast period (2023-2030). Given the favorable industry trends, investing in quality auto stocks VLVLY, VC, and RUSHA could be wise for substantial gains this month. Let’s discuss the fundamentals of these stocks in detail: AB Volvo (publ) ( VLVLY ) Headquartered in Gothenburg, Sweden, VLVLY manufactures and sells trucks, buses, construction equipment, and marine and industrial engines worldwide. The company provides products under the brands – Volvo, Renault Trucks, UD Trucks, Eicher, Arquus, and Dongfeng Trucks. On November 14, VLVLY and CRH, the global leader in building materials solutions, signed a Memorandum of Understanding (MoU) to accelerate net-zero innovations in the design and deployment of on-road vehicles and off-road equipment used in construction with a focus on next-gen technology deployment, scaling cutting-edge technology, and operational efficiency. This collaboration aligns with VLVLY’s ambitious journey to reduce emissions. The company aims to have 35% fully electric sales by 2030 and be net-zero in its value chain by 2040. On November 10, VLVLY announced that it had been selected as the winning bidder in an auction for the business and assets of the Proterra Powered business unit at a purchase price of $210 million. The transaction between Volvo and Proterra Inc. and Proterra Operating Company as sellers is subject to approval by the bankruptcy court in the U.S. The assets to be acquired include a development center for battery modules and packs in California and an assembly factory in South Carolina. With this acquisition, Volvo will complement the current and accelerate its future battery-electric road map. For the third quarter that ended September 30, VLVLY’s net sales grew 15.2% year-over-year to SEK132.40 billion ($12.80 billion). Its adjusted operating income rose 61% from the year-ago value to SEK19.11 billion ($1.84 billion). The company’s EBITDA was SEK21.45 billion ($2.07 billion), up 22.2% from the previous year’s quarter. In addition, the company’s income for the period amounted to SEK14.09 billion ($1.36 billion), representing an increase of 62.2% year-over-year. Its EPS rose 63.4% from the prior year’s quarter to SEK 6.93. Street expects VLVLY’s EPS and revenue for the fiscal year (ending December 2023) to increase 58.1% and 12.4% year-over-year to $2.73 and $51.82 billion, respectively. Moreover, the company surpassed the consensus revenue estimate in three of the trailing four quarters. Shares of VLVLY have gained 25.3% over the past six months and 33.4% over the past year to close the last trading session at $23.29. VLVLY’s robust outlook is reflected in its  POWR Ratings . The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree. The stock has an A grade for Stability and a B for Growth and Quality. It is ranked #5 out of 51 stocks in the B-rated Auto & Vehicle Manufacturers industry. Click here to access additional VLVLY ratings for Sentiment, Value and Momentum.