Two days ago I was quoted on the record as saying that the auto sector of Wall Street has started off the second half of 2015 “on a much-needed positive note,” while acknowledging that the sector is still basically unmoved as whole over the past 2 years.
That’s not good considering that the overall market has been climbing during that time span.
But I also picked out a rising star in the auto sector, and have very good reason to believe it could be ready to hand investors a very nice payday…
Is there anyone reading this right now whom doesn’t want a big chunk of change for basically no effort? No? Good…
I’ve identified an opportunity that I’d like to share with you, but first you need to understand the entire situation in order to make an educated decision. I can give you information and guidance, but I can’t tell you where to invest your hard-earned money.
To begin, let’s take a look at the auto sector as a whole…
The CARZ exchange-traded fund, or ETF, is a representative of the auto industry as a whole. It is the First Trust Nasdaq Global Auto Index Fund, which takes into account the situations of the individual auto companies. Take a look at its chart from Stockcharts.com:
There have been a few small movements both up and down for the price of CARZ, but for the most part you can see that the auto industry is at the same levels it was towards the final quarter of 2013.
And that’s while the stock market has been in a steady uptrend, much of which was relatively aggressive.
That shows the relative weakness of the auto sector.
However, most of the sector just received a much-needed boost thanks to some positive earnings reports. Obviously that doesn’t mean the suddenly the auto sector will rush to the forefront of market leaders, but it could be the beginning of a solid trend for some of the individual auto companies.
The one I picked out as a “rising star” is Toyota (TM), which reported an earnings increase of 10% the day after I was on the record as saying had an upside of 9 to 10%.
It’s worth noting that the good earnings numbers came largely as a result of a cheap yen and cost-reduction strategies, which were able to mask a drop in vehicle sales.
Still, the likelihood that oil prices will continue a gradual descent should help sales going forward, and TM, which is currently trading around $130 a share, could soon be reaching up towards its recent highs of $145 per share.