The automotive industry is starting to shift gears this year as supply chains continue to improve and the worldwide rate-cut cycle stimulates more demand. In addition, Trump’s election is also changing things with loosened regulations helping legacy automotive companies, and tariffs helping domestic companies, though it hurts companies abroad.
Regardless, the electrification megatrend has continued, and electric vehicle shipments are projected to surge by 17% this year. Also, the European automotive sector is showing signs of recovery with a projected 2.1% growth.
The broader sector could get a lot hotter this year if macroeconomic metrics cooperate and rates come down more. Let’s take a look at the stocks that have already started to climb.
A worker assembling parts in an automotive factory for an autonomous vehicle.
Methodology
For this article, I screened the top-performing automotive stocks year-to-date. Stocks that I have covered recently will be excluded from this list.
I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds invest in? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
15. Rush Enterprises Inc (NASDAQ:RUSHA)
Number of Hedge Fund Holders In Q3 2024: 17
Rush Enterprises Inc (NASDAQ:RUSHA) is a retailer of commercial vehicles.
The stock is up significantly so far in 2025 due to the company posting solid results. It has generated solid FCF despite the difficult conditions in the commercial vehicle industry. It has also approved a new stock repurchase program that authorizes the company to repurchase $150 million of its Class A and Class B shares.
Analysts also expect good results as it is set to report earnings for Q4 and full-year 2024 on February 19, 2025.
The consensus price target of $69 implies 15.66% upside.
RUSHA stock is up 8.89% year-to-date.
14. Douglas Dynamics Inc (NYSE:PLOW)
Number of Hedge Fund Holders In Q3 2024: 16
Douglas Dynamics Inc (NYSE:PLOW) manufactures commercial work truck attachments and equipment.
The stock is up significantly year-to-date as analysts are optimistic about its upcoming Q4 2024 earnings report. The earnings release is scheduled for February 24, 2025. Current forecasts project $155 million in revenue vs. $134 million in Q4 2023. Full-year EPS is expected to grow 36.3% to $1.38.
Moreover, it completed a sale-leaseback deal with TPG Angelo Gordon in September 2024.
The consensus price target of $28.5 implies 10.53% upside.
PLOW stock is up 9.18% year-to-date.
13. Valvoline Inc (NYSE:VVV)
Number of Hedge Fund Holders In Q3 2024: 35
Valvoline Inc (NYSE:VVV) provides automotive preventive maintenance services through its service centers.
The stock is up significantly so far in 2025 as it reported sales growth of 11% year-over-year and system-wide store sales of 14% to $820 million in the latest quarter. It also had 35 new store openings, with net income growing 177% year-over-year to $94 million. The results beat analyst estimates.
Furthermore, Valvoline completed a refranchising deal in Texas during Q1 to convert company-owned stores to franchises. It’s an asset-light approach that will lower its CapEx and increase high-margin royalty revenue. The company’s CEO thinks it will help it get 160 to 185 new stores in FY2025 with improved ROIC.
Valvoline increased its full-year EPS forecast to $1.57-$1.67 (vs. $1.62 consensus) and maintained a $1.7 billion revenue guidance.
The consensus price target of $45.11 implies 12.5% upside.
VVV stock is up 10.83% year-to-date.
12. Group 1 Automotive Inc (NYSE:GPI)
Number of Hedge Fund Holders In Q3 2024: 40
Group 1 Automotive Inc (NYSE:GPI) is an automotive retailer.
The stock is up significantly so far this year due to it reporting solid financial results in Q4 2024. Revenue grew 11.5% year-over-year to $19.9 billion and Q4 revenue grew 23.8% to $5.5 billion.
Vehicle sales growth was also solid, with Q4 growth at 24%.
The company acquired 59 U.K. dealerships (Audi, BMW, Porsche, etc.) with a potential annual revenue of $2.9 billion. Plus, it restructured charges of $16.7 million in Q4, which are expected to yield over $50 million in annual savings.
The consensus price target of $447.83 implies 4.37% downside.
GPI stock is up 11.17% year-to-date.
11. Strattec Security Corp (NASDAQ:STRT)
Number of Hedge Fund Holders In Q3 2024: 8
Strattec Security Corp (NASDAQ:STRT) makes automotive security and access control products.
The stock is up significantly year-to-date as it beat analyst expectations in Q2 FY2025. Revenue rose 9.6% year-over-year to $129.9 million vs. $118.5 million last year. Gross margin also expanded to 13.2% from 11.4% due to higher volume and a $3.5 million FX tailwind from the weaker Mexican peso.
Strattec Security Corp ended up generating $9.4 million in OCF in Q2, with its cash balance reaching $42.6 million. Adjusted EBITDA is now at $8 million and EPS of $0.32 beat estimates by 132.1%, with net income up 30% year-over-year.
STRT stock is up 13.86% year-to-date.
10. Camping World Holdings Inc (NYSE:CWH)
Number of Hedge Fund Holders In Q3 2024: 21
Camping World Holdings Inc (NYSE:CWH) is a retailer of RVs.
The stock is up significantly so far this year as it is expected to post solid Q4 2024 earnings on February 25, 2025. Analysts expect revenue growth from expanded dealership networks, especially as it acquired 7 dealerships from Lazydays Holdings and three Mid-Atlantic locations.
Hedge funds increased stakes here significantly, with firms like Raymond James and Swiss National Bank adding positions. The institutional ownership here is over 50% now.
Q3 2024 saw 29% YoY growth in same-store new RV sales, if it manages to build on that, the high short interest could lead to more upside.
The consensus price target of $27.71 implies 15.26% upside.
CWH stock is up 13.99% year-to-date.
9. AutoNation Inc (NYSE:AN)
Number of Hedge Fund Holders In Q3 2024: 32
AutoNation Inc (NYSE:AN) is the largest automotive retailer in the U.S.
The stock is up significantly year-to-date after a strong Q4 2024 earnings beat and optimistic guidance for this year. It reported Q4 adjusted EPS of $4.97, which beat estimates by $0.71. Revenue also rose 7% year-over-year to $7.2 billion. AN Finance originations tripled to $1.1 billion in 2024 and it saw a 14% rise in used vehicle gross profit, along with 5% growth in after-sales services. 12% same-store new vehicle unit growth outpaced market trends.
In addition, the company repurchased $460 million of shares in 2024 and reduced outstanding shares by 7%. It still has a $1.3 billion liquidity position, so there’s still room for more buybacks down the line.
AutoNation was named to Fortune’s 2025 World’s Most Admired Companies list for the eighth consecutive year.
The consensus price target of $195.57 implies 0.21% upside.
AN stock is up 14.9% year-to-date.
8. Massimo Group (NASDAQ:MAMO)
Number of Hedge Fund Holders In Q3 2024: N/A
Massimo Group (NASDAQ:MAMO) makes power sports vehicles.
The stock is up significantly so far this year as it relocated production of its MVR Golf Cart Series from overseas to Garland, Texas, to bypass new 149%–500% U.S. tariffs on imported low-speed vehicles. The announcement triggered a +15.53% single-day rally on January 10, 2025.
Moreover, Massimo’s Texas factory implemented advanced robotics in late 2024. The robotics are expected to boost production efficiency by 50% and reduce labor costs by 30% through automated assembly lines. The first three quarters of 2024 saw revenue growth at 20.8% year-over-year to $91.2 million.
Before you buy the stock, it is also worth noting that CEO David Shan owns 78% of shares.
MAMO stock is up 17.12% year-to-date.
7. Niu Technologies (NASDAQ:NIU)
Number of Hedge Fund Holders In Q3 2024: 6
Niu Technologies (NASDAQ:NIU) is a Chinese EV company.
The stock has surged year-to-date after the announcement that it sold 226,634 units in Q4 2024. This is a 65% year-over-year increase. Over 70% of Q4 sales came from recently introduced vehicles targeting Gen Z and female riders.
Kick-scooter and e-bike sales jumped 65% year-over-year in Q4 and 57% for all of 2024. Plus, Niu had new prototypes of electric off-road dirt bikes that will let it enter the $12 billion global power sports industry.
NIU stock is up 17.32% year-to-date.
6. China Yuchai International Ltd (NYSE:CYD)
Number of Hedge Fund Holders In Q3 2024: 6
China Yuchai International Ltd (NYSE:CYD) is a holding company that specializes in manufacturing diesel and natural gas engines for commercial vehicles through its subsidiary called Guangxi Yuchai Machinery.
The stock is up significantly so far this year as investors are optimistic about its upcoming 2025 financial results due February 25, 2025.
Analysts expect growth in on-road (truck/bus) and off-road (agricultural/industrial) engine sales, which is expected to build on earlier 2024 results. The most recent quarter showed over 12% revenue growth year-over-year.
Many think the stock is still undervalued as its net tangible assets of over $1 billion are more than twice its market cap.
CYD stock is up 17.42% year-to-date.
5. Sonic Automotive Inc (NYSE:SAH)
Number of Hedge Fund Holders In Q3 2024: 14
Sonic Automotive Inc (NYSE:SAH) is an automotive retailer.
The stock is up significantly year-to-date after it reported better-than-expected Q4 2025 earnings.
It reported $3.9 billion in Q4 revenue, up 9% year-over-year. Net income grew 51% year-over-year to $58.6 million and adjusted EPS of $1.67 beat estimates. Analysts expected $3.61 billion in revenue and just $1.26 in EPS.
Sonic Automotive acquired Audi New Orleans in December 2024.
The consensus price target of $67.2 implies 10% downside.
SAH stock is up 18.01% year-to-date.
4. Asbury Automotive Group Inc (NYSE:ABG)
Number of Hedge Fund Holders In Q3 2024: 30
Asbury Automotive Group Inc (NYSE:ABG) is an automotive retailer.
The stock is up significantly year-to-date after it reported solid Q4 2024 results, with revenue up 18% year-over-year to $4.5 billion as new vehicle sales grew 19%. Parts/service gross profit also grew 19% to $340 million.
That said, adjusted EPS declined slightly by 2% to $7.26. However, investors are still confident since there have been some operational efficiency improvements, with $42 million in cost reductions.
The consensus price target of $264 implies 12.19% downside.
ABG stock is up 23.85% year-to-date.
3. XPeng Inc (NYSE:XPEV)
Number of Hedge Fund Holders In Q3 2024: 20
XPeng Inc (NYSE:XPEV) is a Chinese EV company.
The stock is up markedly so far this year due to January 2025 deliveries being up 268% year-over-year. The company delivered 30,350 vehicles and this was its third consecutive month above 30,000 units.
Its budget EV model at a starting price of about $17,000 also achieved 15,000 monthly deliveries for two straight months.
XPeng entered the U.K. market with its G6 SUV and plans to enter 60+ countries this year. That said, price wars with BYD could lead to more turbulence in its home market.
The consensus price target of $12.91 implies 16.69% downside.
XPEV stock is up 31.3% year-to-date.
2. Carvana Co (NYSE:CVNA)
Number of Hedge Fund Holders In Q3 2024: 66
Carvana Co (NYSE:CVNA) is an e-commerce platform for buying and selling used cars.
The stock has been surging year-to-date, especially after JPMorgan’s bullish $350 price target. It cited a $4 billion deal with Ally Financial to sell auto loans.
Moreover, the company has solid EBITDA momentum. Its Q3 2024 results beat expectations by solid margins. It reported $0.64 against a $0.25 estimate. Revenue also trounced expectations and came in at $3.65 billion vs. a $3.45 billion forecast.
Analysts are very optimistic about the upcoming Q4 reports. Analysts expect $0.32 in EPS and $3.35 billion in revenue, which implies 38% growth year-over-year.
Hindenburg had a short seller report in January and CVNA fell 13% over two days but rebounded as analysts dismissed concerns.
The consensus price target of $249.29 implies 7.82% downside.
CVNA stock is up 33.33% year-to-date.
1. Dana Inc (NYSE:DAN)
Number of Hedge Fund Holders In Q3 2024: 24
Dana Inc (NYSE:DAN) is a drivetrain and e-propulsion systems company.
The stock is up significantly so far in 2025. It announced an increased cost reduction target to $300 million through 2026, up from the previous $200 million target.
Furthermore, it reported a preliminary 2024 adjusted EBITDA of $885 million with an improved margin of 8.6%. This is up from 8% in 2023 and provided optimistic guidance for this year, with adjusted EBITDA expected at $925-$1,025 million and an implied 10% margin at the midpoint.
Also, it announced plans to sell its Off-Highway business segment. This could reduce debt by a significant amount.
The consensus price target of $18.86 implies 15.58% upside.
DAN stock is up 41.26% year-to-date.
While we acknowledge the potential of DAN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DAN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
