GM, Tesla, Ford: Hedge Funds’ Favorite Auto Manufacturers

The automobile industry has been facing headwinds since the start of the year, as the sector seems to have plateaued after surging to record sales of 17.4 million units in 2015. In the first seven months of 2016, U.S. auto sales totaled 4.253 million units, a decline of 7.7% compared to the same period of last year.

In this article, we’ll take a look at the top automobile stocks liked by the smart money investors in our database to see how they’re positioning themselves in auto stocks amid the sales declines.

Our research determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).

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Thor Industries, Inc. (NYSE:THO)

– Number of Hedge Funds With Long Positions (as of June 30): 23

– Aggregate Value of Hedge Funds’ Holdings (as of June 30): $213.71 million

23 hedge funds in Insider Monkey’s database held $213.71 million worth of stakes in Thor Industries, Inc. (NYSE:THO) at the end of the June quarter. The Indiana-based company’s stock has gained over 45% so far this year, making it one of the best performing stocks in the sector. In August, Wunderlich Securities downgraded Thor Industries Inc. (NYSE:THO) to ‘Hold’ from ‘Buy’ given the stock’s appreciation, but reiterated its $80 price target on it. Chuck Royce’s Royce & Associates owned 1.62 million shares of the RV manufacturer on June 30.

Fiat Chrysler Automobiles NV (NYSE:FCAU)

– Number of Hedge Funds With Long Positions (as of June 30): 27

– Aggregate Value of Hedge Funds’ Holdings (as of June 30): $534.79 million

27 funds in our system owned $534.79 million worth of Fiat Chrysler Automobiles NV (NYSE:FCAU)’s stock on June 30, down from 28 funds with $645.66 million in positions on March 31. Fiat Chrysler Automobiles NV (NYSE:FCAU) posted a 3% rise in sales for the month of August, mainly due to the strength of its Jeep brand and fleet sales, which accounted for 24% of its total sales during the month. The SUV brand’s sales rose by 12%, with Cherokee sales up by 41% compared to last August. In contrast to Jeep’s success, Chrysler brand sales decreased by 22%. Fiat Chrysler’s stock has lost over 26% so far this year.

On the next page we’ll take a look at the three auto manufacturers that are the most beloved of hedge funds.