10 Best Automotive Stocks To Buy Now

7. AutoNation, Inc. (NYSE:AN)

Number of Hedge Fund Holders: 38

AutoNation, Inc. (NYSE:AN) is an automotive retailer based in Fort Lauderdale, Florida. The company offers new and used vehicles, parts, and automotive repair and maintenance services.

While many automotive retailers have been struggling in the current economy, investors may still benefit from considering investing in AutoNation, Inc. (NYSE:AN) because it is dedicated to mitigating the impact of the economy on its earnings and growth. One strategy deployed by the company to do this is highlighted by its history of stock buybacks. Between 2021 and 2022, AutoNation, Inc. (NYSE:AN) bought back about $4 billion of its stock, and in its first-quarter earnings call, the company’s board authorized an additional $1 billion of share repurchases.

Share repurchases help companies improve and juice up their EPS. Through this strategy, AutoNation, Inc. (NYSE:AN) did manage to protect its earnings in the first quarter, and it thus continued with this strategy in the second quarter as well. AutoNation, Inc. (NYSE:AN) is also actively making investments in marketing and capital expenditures to build up its inventory. These moves have also resulted in many investors developing a more optimistic opinion of the stock and its long-term growth prospects.

In the second quarter, there were 38 hedge funds long AutoNation, Inc. (NYSE:AN), with a total stake value of $616.3 million.

Alluvium Asset Management mentioned AutoNation, Inc. (NYSE:AN) in its second-quarter 2024 investor letter:

“AutoNation, Inc. (NYSE:AN) (down 3.7%) operates around 350 dealer franchises across the US, as well as collision centres and used vehicle stores. When compared to Group 1, it sells more units at a slightly higher price and margin, and derives around 50% more revenue. But its strategy is different, with nationwide branding and centralised operations. Although we prefer the Group 1 model, the economics of Autonation look attractive to us. And by introducing this into the portfolio we could thereby invest more than 5% of assets in this sector without necessitating the sale of other attractive large positions. And so after selling a little Group 1 and buying Autonation we ended the quarter with 4.1% and 1.9% positions respectively.”