Carpocalypse Now?

Wednesday, March 6, 2019
By Paul Martin

Wed, 03/06/2019

As if following the plot of a scary movie, the automotive sector had a frightening moment early in 2017 followed by a period of calm which ended with slightly higher volume for 2018. The question on most investors minds now is, Do we have the all-clear to buy seemingly undervalued auto stocks or is this simply the part in the movie of dead silence right before the scene that makes us spit out our popcorn and jump out of our seats? My responsibility is to help you answer that question, and I’ll do so with the aid of proprietary indicators that I have developed to very accurately forecast volume and margin for several companies in the automotive sector. Before moving on, I strongly recommend watching my latest interview with Real Vision where I discuss the indicators that work, the indicators that lag, and the indicators that should be ignored altogether.

2018 Recap
In order to fully understand the current state of the auto industry, I think it’s important to discuss the significant events that impacted last year’s results. In 2018, the auto market started with a decline in retail sales and a continued reduction in the rate of production from most manufacturers through the month of February. After writing this article for Real Vision’s Think Tank in October of 2017, everything seems to be going according to plan. Then something unexpected happened, used-vehicle values suddenly spiked above their expected range as a result of a large draw in used-vehicle retail inventory.

The Rest…HERE

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