5 auto analysts in high gear

August 21, 2016 09:00 AM
These five TipRanks analysts made the most profitable calls on automotive stocks during Q1.

 

These five TipRanks analysts made the most profitable calls on automotive stocks during Q1. Buckle your seat belts and let’s take a look at how well these analysts performed.

1. Dan Galves, of Credit Suisse predicted the trajectory of Tesla Motors Inc. (TSLA) on Feb. 8 when he reiterated his outperform rating with a $325 price target. Galves stated that concerns regarding the Model X production ramp were overblown and he remained bullish ahead of Tesla’s quarterly earnings report. Galves, while acknowledging several slowdowns in the production process early on, noted, “The production process is quite dialed-in right now, there are no critical unresolved design issues, and once re-designed parts are available, the ramp should progress quickly.” 

He added that Model S production continued to run at high levels. At the time of Galves’ rating, Tesla was valued at $147.99. Three months later, shares closed at $214.93. If you had followed Galves’ advice, you would have earned a 45% return over three months.

2. Trip Chowdhry, an analyst at Global Equities, struck gold on Feb. 10 when he reiterated his overweight rating on Tesla, with a 12- to 18-month price target 

of $385. Chowdhry stated that Tesla’s “fundamentals are strong” and he predicted full-year sales of 85,000 for the Model X and Model S cars in 2016. He also pointed to an increase of its Model X production of 1,000 cars per week and the revealing of the Model 3 on March 31 as good indicators for Tesla’s future. Chowdhry believed that Tesla is the “only growth company in the whole [auto] universe” with revenues growing at 60% per year. 

At the time of Chowdhry’s rating, the stock was valued at $143.67. Three months after the call, shares closed at $208.92. If you had followed Chowdhry, you would have earned a 45% return over three months.

3. S&P Capital Analyst Efraim Levy recommended shares of Ford Motor Company (F) on Jan. 28 when shares had dipped to $11.58. By April 16, shares had soared to $14.09, earning Levy a 21.7% return on his investment call. 

Levy attributed his rating to increased global sales. Though he reiterated his “strong buy” rating for Ford, he did lower his price target for the stock by $2 to $17. At the time, Bob Shanks, Ford’s CFO, said, “We have a very strong, robust structure, so if and when there will be a downturn, we’re very well prepared to manage that and continue to be profitable, pay our regular dividend and invest in the business.”

Levy also cited  growth and expansion in Europe and China for his outlook. 

4. Another winner on Ford’s stock was analyst James Albertine of Stifel Nicolaus. Albertine recommended buying Ford on Feb. 3. By May 3 Ford was up 18.4%. For this rating, he cut his price target from $15.00 to $13.50, leaving room for the probability of a recession. Albertine also cut 2016 and 2017 estimates based on the possibility of a market downturn. Specifically, Albertine cut his fiscal year 2017 earnings-per-share (EPS) estimate to $2.00 from $2.14, and 2018’s EPS to $2.09 from $2.33. 

5. Buckingham Analysts Joseph Amaturo maintained his “Buy” rating for General Motors (GM) on Feb. 1. Amaturo noted his expectation for January’s U.S. light vehicle sales of 16.7 million units, a 2.9% increase from a year earlier. This expectation represented a big drop from current levels, but Amaturo expected demand to pick up in February and March. He described the weak January numbers as “a plateau in the market, not a peak.” He also predicted 8.5% sales growth from GM.

At the time of Amaturo’s rating, the stock was valued at $30.11. Three months later, shares closed at $31.80. If you had followed Amaturo’s advice, you would have earned a 5.61% return over three months.

About the Author

Uri Gruenbaum is the CEO and co-founder of TipRanks, whose proprietary technology is based on natural language processing & machine learning algorithms that constantly track, rank & measure financial experts based on their stock ratings, bringing accountability into the markets. @TipRanks