Avoid auto stocks, traders say as Ford shares rise on CEO switch

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Avoid auto stocks, traders say as Ford shares rise on CEO switch $F $GM $TSLA $NKLA (via TradingNation)

Even so, none of the pure-play auto stocks look attractive to Mark Tepper, president and CEO of Strategic Wealth Partners.on Tuesday. "Vehicle sales overall have been on the decline for years and that was before any of this Covid stuff happened. And if you think about it, if work-from-home is permanent to some extent as a lot of people believe it's going to be, people are going to be putting fewer miles on their cars.

"We're not seeing a lot of those either," Tepper said. "Just to kind of put things in perspective, Tesla has 10 times the market cap of Ford. Ford sold 367,000 F-Series pickups in the first half of this year and that's how many vehicles Tesla sold in pretty much all of last year. So, I just don't see a light at the end of the tunnel for the traditional automakers until they make a bigger push into EVs. I think that's what it's going to take.

Throw in a low interest-rate environment making it easy to borrow financing, and automakers seem to be falling victim to a kind of "technological deflation" as people turn to the used-car market instead of buying new, Gordon said.

 

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