Monday, January 10, 2011

2011: Comeback of the auto industry, some stocks and ETF's to keep in mind.

Last year the auto industry performed better then forecasted by most analysts, the US auto industry actually made a profit.
I believe the growth will continue well into the new year, thanks to emerging markets like Brazil, China and India. Demand for new cars in these markets as well as domestic sales.
I'm excited to take a look at the auto industry when it comes to buying stocks and ETF's. A few companies to keep in mind are (F) Ford and (GM), both performing pretty well. Ford for example traded around $12 by the end of September of last year and it trading well above $18 now. Same goes for GM that added about $6 to it's stock value in a matter of two months.
Although there are ETF's all over the place, tracking about every index and sector imaginable, there isn't one in particular that tracks the auto industry as a whole, which is kind of odd if you ask me. There is an ETF Direxion Auto Shares, which is still in registration with no issue date announced. Well, I'm not waiting for that since there are plenty of other opportunities out there, and this sector (in my opinion) is still cheap.
Take a look at some of the ETF's that have automobile company shares in them;
  • Consumer Discretionary Select Sector SPDR (NYSEArca: XLY). Ford is 5.2%.
  • iShares Dow Jones U.S. Consumer Goods (NYSEArca: IYK). Ford is 4.1% and GM is 1.5%.
  • First Trust IPOX-100 Index Fund (NYSEArca: FPX) . GM is 10.3%
  • BLDRS Asia 50 ADR Index (ADRA). Toyota is 8.6%, Honda is 5.2%, Mitsubishi is 5.4%.
  • SPDR S&P International Consumer Discretionary (NYSEArca: IPD): Toyota is 6.7, Daimler Chrysler is 4%, Honda is 3.7% and Hyundai is 1.8%.
The first one being (XLY) Ford being 5.2% in the index, which skyrocketed in the past few months, according to the chart below:

The iShares consumer goods IYK (It has Ford at 4.1% and GM is 1.5%)also performing well (notice the similar trend line)

(FPX) GM is 10.3% (!) shown below, (caution, notice the low volume! Similar trend line as the charts shown above, cheaper price.)

(ADRA) With Toyota at 8.6%, Honda is 5.2%, Mitsubishi is 5.4% ...also has low volume but again shows similar trend lines.

And finally (IPD), Toyota is 6.7, Daimler Chrysler is 4%, Honda is 3.7% and Hyundai is 1.8% ...risky, choppy chart with low volume, but follows similar trend line (cheaper price)

Those are some ETF's to consider, along with their option chains, which interests me more. I never tend to hold on to a stock longer then a few months, (at least). Also, take a look at car manufacturers, domestic, as well as foreign for your portfolio. Mine so far has (F).
I'll make a follow up post at the end of this year to see how each fund performed!

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