Best Auto Stocks for 2019 - Should I Buy Ford Stock, Tesla Stock, GM Stock or Fiat's Stock | Summary and Q&A

TL;DR

Analyzing the financial performance of major auto companies like Ford, General Motors, Fiat Chrysler, and Tesla to determine investment potential.

Key Insights

• 🚗 The auto industry is highly cyclical and tends to perform poorly during economic downturns.
• 😘 Profit margins in the auto industry are generally low compared to other industries.
• ✋ Tesla stands out with its high revenue growth but fluctuating net income due to increased expenses.
• ✋ Ford and GM offer dividend potential, with Ford having the highest dividend yield.
• 🥳 Tesla's valuation is based more on its potential to disrupt the industry rather than traditional financial ratios.
• 😘 Analysts have low expectations for Fiat Chrysler's future revenue and profits.
• ❓ Ford is a suitable addition to a dividend portfolio, while GM offers stability and a decent dividend yield.

Transcript

hey YouTube I'm Jimmy in this video I'm gonna walk through my analysis of the US auto industry I'm gonna touch on four different companies Ford General Motors Fiat Chrysler and then I'm gonna put tesla are in there even though test is a little bit different so the questions were trying to answer our which of these auto companies are the best invest... Read More

Questions & Answers

Q: How are the profit margins of auto companies affected by the nature of the industry?

The capital-intensive nature of the auto industry, coupled with pricing competition, leads to low profit margins compared to other industries.

Q: Why does Tesla's net income not align with its revenue and gross profits?

Tesla's net income has been affected by increased expenses, including interest expense from taking on more debt and higher spending on research and development.

Q: How does Tesla's valuation differ from other auto companies?

Tesla's valuation is based more on its disruption potential rather than traditional financial ratios. It is seen as a speculative play, with the potential for high returns but also high risk.

Q: Which auto companies have the highest dividend yields?

Ford has the highest dividend yield, followed by General Motors. Fiat Chrysler does not currently pay a dividend.

Q: How do Ford and GM differ in terms of stability and dividend yields?

GM offers better profit margins and slightly lower dividend yield compared to Ford, indicating a larger safety net and slightly more stability.

Summary & Key Takeaways

• The auto industry is cyclical and heavily affected by economic downturns.

• Ford has low profit margins compared to other industries, while GM shows signs of improvement in profit margins.

• Tesla has seen significant revenue growth, but its net income has been inconsistent due to increased expenses.

• Ford and GM are good options for dividend portfolios, while Tesla offers potential with high volatility.