5 Best Car Stocks To Buy Now

In this article, we discuss 5 best car stocks to buy now. If you want to see more stocks in this selection, check out 10 Best Car Stocks To Buy Now. 

5. Rivian Automotive, Inc. (NASDAQ:RIVN)

Number of Hedge Fund Holders: 29

Rivian Automotive, Inc. (NASDAQ:RIVN) produces and sells electric automobiles and accompanying parts. The company presents a selection of pickups that can seat five passengers and sports utility vehicles that can seat seven passengers. On April 20, it was announced that the roster of vehicles that meet the requirements for the electric vehicle tax credit in the United States has been expanded yet again, with Rivian Automotive, Inc. (NASDAQ:RIVN) R1T and R1S now included in the list. If new buyers order a configuration that is under the $80,000 limit, they can receive a $3,750 credit.

On April 18, Morgan Stanley maintained an Overweight rating on Rivian Automotive, Inc. (NASDAQ:RIVN) but lowered the firm’s price target on the shares to $24 from $26. In 2022, investor confidence in Rivian Automotive, Inc. (NASDAQ:RIVN) had decreased due to production delays, industry-wide challenges, and intense competition in the electric vehicle market. However, the firm believes that there may be reasons to be optimistic about Rivian Automotive, Inc. (NASDAQ:RIVN) before the upcoming earnings report, given that the stock has already factored in much of the negative news. After updating its projections, the firm’s “bull case” target is now $45 (down from $55) and its base case target is $24.

According to Insider Monkey’s fourth quarter database, 29 hedge funds were long Rivian Automotive, Inc. (NASDAQ:RIVN), compared to 30 funds in the prior quarter. George Soros’ Soros Fund Management is the biggest stakeholder of the company, with 14.3 million shares worth $264.3 million. 

Baron Asset Fund made the following comment about Rivian Automotive, Inc. (NASDAQ:RIVN) in its Q4 2022 investor letter:

“Consumer Discretionary investments along with the lack of exposure to the strong performing Energy sector offset a portion of the above-mentioned gains. Within Consumer Discretionary, the underperformance of electric vehicle (EV) manufacturer Rivian Automotive, Inc. (NASDAQ:RIVN) coupled with lower exposure to this better performing sector hampered relative results. Rivian’s shares fell as investors fretted over the company’s unit economics and how macroeconomic uncertainty is impacting the EV industry.

Rivian Automotive, Inc. is an EV manufacturer producing vehicles for the consumer and corporate delivery van markets. Its shares were under pressure during the quarter. Investors remained focused on the company’s execution challenges, the implied unit economics for its vehicles, and near-term headwinds for the automotive industry stemming from a weaker global economy. Despite these headwinds, we are comfortable with Rivian’s liquidity position and its competitive position within the EV industry, which we believe will continue to grow at impressive rates. Rivian should also benefit from its positive product reviews, its integrated technology approach, and its industry partnerships.”

4. Ferrari N.V. (NYSE:RACE)

Number of Hedge Fund Holders: 32

Ferrari N.V. (NYSE:RACE) is involved in the global design, engineering, manufacturing, and distribution of high-end performance sports cars. The company provides various types of vehicles, including range, special series, Icona, and supercars, as well as limited edition supercars and customized one-off cars. Additionally, the company offers track cars designed for racing. It is one of the best car stocks to watch. 

On April 14, Ferrari N.V. (NYSE:RACE) stock rose significantly after revealing a historic order list that reaches until 2024. Additionally, the company disclosed the outcomes of the resolutions proposed at its Amsterdam meeting, all of which were accepted. One of the accepted proposals involves paying a dividend in cash of €1.81 per common share outstanding, equating to €329 million, to shareholders on May 5.

Goldman Sachs analyst George Galliers upgraded Ferrari N.V. (NYSE:RACE) to Neutral from Sell with a price target of $283, up from $182 on April 6. The analyst’s outlook on the luxury segment of the automobile industry has become more optimistic, as he believes it is less susceptible to competitive threats and will likely remain steady during periods of economic downturn. Furthermore, the analyst stated that the recent shift in regulations to permit the use of e-fuel could decrease capital expenditure and lower the risk of companies and their brands in the long run.

According to Insider Monkey’s fourth quarter database, 32 hedge funds were bullish on Ferrari N.V. (NYSE:RACE), compared to 31 funds in the prior quarter. Anand Desai’s Darsana Capital Partners is the largest stakeholder of the company, with 750,000 shares worth $160.6 million. 

Ensemble Capital made the following comment about Ferrari N.V. (NYSE:RACE) in its Q1 2023 investor letter:

“Ferrari N.V. (NYSE:RACE) (+26.48%): The luxury automaker’s long awaited Purosangue, their first four door, four seater vehicle, has proven so popular that the company announced that they have ceased accepting new orders as they are sold out through all of this year and into 2024. The Purosangue is designed not as a copycat sports utility vehicle that many other luxury automakers sell, but as a true Ferrari car that their devoted fan base can use for more practical transportation needs. Since the average Ferrari is only driven a few thousand miles a year or less, they are best understood as mechanical works of art rather than a means of transportation. But with the introduction of the Purosangue, Ferrari enthusiasts will have a vehicle that meets transportation needs, while still delivering the extremely high end experience that you would expect from a car that costs about $500,000.”

3. Ford Motor Company (NYSE:F)

Number of Hedge Fund Holders: 40

Ford Motor Company (NYSE:F) develops, designs, and services a range of Ford trucks, commercial cars and vans, sport utility vehicles, and Lincoln luxury vehicles worldwide. On April 6, Ford Motor Company (NYSE:F) declared a quarterly dividend of $0.15 per share, in line with previous. The dividend is payable on June 1, to shareholders of record on April 26. Ford’s overall vehicle sales were up 10.1% in Q1 2023 to 475,906 vehicles.

On March 27, Citi analyst Itay Michaeli reiterated a Neutral rating on Ford Motor Company (NYSE:F) and reduced the price target of Ford from $14 to $12.50. The company’s reaffirmed guidance indicated a low likelihood of negative changes, but Michaeli believes that the first quarter of the year will provide insight into the company’s ability to execute its plans after a challenging second half of 2022. While Ford Motor Company (NYSE:F) has the potential to remain profitable during most economic downturns and maintain sufficient liquidity, the firm has adjusted its earnings forecasts due to macroeconomic risks.

According to Insider Monkey’s fourth quarter database, 40 hedge funds were long Ford Motor Company (NYSE:F), compared to 47 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is a prominent stakeholder of the company, with 17.5 million shares worth $203.7 million. 

Here is what Leaven Partners has to say about Ford Motor Company (NYSE:F) in its Q3 2022 investor letter:

“In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as Ford (NYSE:F), has recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6%[2] from 7.2% in early August and slashing full-year profit growth to 4.5%.”

2. General Motors Company (NYSE:GM)

Number of Hedge Fund Holders: 80

General Motors Company (NYSE:GM) is a multinational corporation headquartered in Detroit, Michigan. The company designs, manufactures, markets, and distributes vehicles and vehicle parts globally. It produces a range of vehicles, including cars, trucks, SUVs, and electric vehicles, under various brands such as Chevrolet, Buick, GMC, and Cadillac. General Motors Company (NYSE:GM) is one of the top car stocks to watch. 

On April 3, General Motors Company (NYSE:GM) reported an increase in sales in Q1 2023 compared to the same period in 2022, with a growth rate of 18% and an accompanying rise in its market share by 1.5%. In the first quarter of 2023, the company sold a total of 603,208 vehicles, driven by a 15% growth in retail sales and a 27% rise in fleet sales. The automaker particularly highlighted its leading position in fleet registrations, with the sale of 73,274 units in the quarter.

Barclays analyst Dan Levy maintained an Equal Weight rating on General Motors Company (NYSE:GM) and lowered the firm’s price target on the shares to $45 from $46 on April 17. According to the analyst, the expectations for Q1 earnings in the US auto and mobility sector are modest, which could lead to a positive reaction from shareholders. While end markets have been relatively stable, Levy believes that further improvement is necessary. He also expects that General Motors Company (NYSE:GM) outlook will remain consistent.

According to Insider Monkey’s fourth quarter database, 80 hedge funds were long General Motors Company (NYSE:GM), compared to 74 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the largest stakeholder of the company, with 50 million shares worth nearly $1.7 billion. 

Here is what Diamond Hill Capital had to say about General Motors Company (NYSE:GM) in its Q3 2022 investor letter:

“Most recently, we initiated a position in General Motors Company (NYSE:GM), one of the largest automakers in the United States. Over the past several years, GM has taken steps necessary to focus the company on the most profitable segments and move into position to compete in an electrified and autonomous world. With the recent rise in interest rates there was a meaningful selloff in the auto industry, which presented us with an attractive entry point to a name we know well.”

1. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 91

Tesla, Inc. (NASDAQ:TSLA) is one of the best car stocks to invest in. Founded in 2003, the company designs, manufactures and sells electric cars, solar panels, energy storage systems, and related products. Tesla’s vehicles include the Model S, Model X, Model 3, Model Y, and the Cybertruck. 

On April 21, after reviewing Tesla’s Q1 report, Barclays maintained an Overweight rating on Tesla, Inc. (NASDAQ:TSLA) but lowered its price target on the company’s stock from $230 to $220. The analyst still believes that Tesla is a long-term winner, but noted that the stock may face challenges in the near future due to a “weak margin outlook.”

According to Insider Monkey’s fourth quarter database, 91 hedge funds were bullish on Tesla, Inc. (NASDAQ:TSLA), compared to 88 funds in the prior quarter. D E Shaw is a prominent stakeholder of the company, with 6.3 million shares worth $785.8 million. 

VGI Partners made the following comment about Tesla, Inc. (NASDAQ:TSLA) in its 2022 annual investor letter:

“Pleasingly, the portfolio also benefited this year from a number of single-stock shorts, including a position in Tesla, Inc. (NASDAQ:TSLA), the well-known electric vehicle manufacturer that was experiencing a slowing in business momentum throughout the year as a result of pressures on consumer discretionary purchases, supply chain disruptions and increasing competition. We have expected for some time that the electric vehicle category would become more competitive, and more recently have begun to witness aggressive price cuts by manufacturers in an attempt to clear inventory, which is a negative trend for an industry that is only likely to see more competition over the coming years. The portfolio also benefited from a short position in a US-listed discount grocery store business, where investors were being pitched a large-scale store rollout story by senior management, albeit using forecasts that were extrapolating the temporarily favourable conditions into the long term and at a time when insider selling was rapidly accelerating. Both these short positions have now been profitably closed.

In meetings with investors over the last six months, we have said that the signposts that we are closer to an equity market bottom would include the reveal of a large fraud as well as a sell-off in Tesla, the retail investor poster-boy. We have seen the collapse of FTX, a large crypto company, and evidence that it is an outright fraud, along with a severe unwind in the Tesla share price (where we fortunately had a short position during CY22; since closed).”

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