NEW YORK (TheStreet) -- With Ford (F) performing strongly and the government trying to exit from GM, many investors are increasingly bullish on auto supplier stocks. As car unit sales continue to stabilize -- or pick up -- auto suppliers will undoubtedly reap rewards, and glean steady business going forward.
One piece of evidence of the investment community's increasingly bullish view towards auto supplier stocks can been seen in the recently rebalanced Hennessy Focus 30 Fund (HFTFX), which invests its assets in 30 mid-cap growth oriented companies, screening for undervalued stocks with above-average growth potential. The top three performers of the rebalanced fund have been Crocs (CROX), TRW Automotive (TRW) and Tenneco (TEN). Two out of the top three are auto supplier stocks.
"Those companies were decimated when GM had to be taken over. So the ones that survived obviously had to cut to the bone and figure out a way to manage this," Hennessy co-portfolio manager Frank Ingarra explains. "I think the ones that we have or at least some other ones that are out there are the strong ones that have survived."
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