This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Automobile stocks: Tesla is a compelling idea, Ford and Toyota steady going

By Chris Lau for Kapitall.

Bears are looking for any negative news to lower the bullish story around Tesla ( TSLA). After a vehicle was stolen, a chase ensued and was then called off. The theft ended in a fiery crash, with the Model S vehicle splitting in two. The horrific destruction of the car pales in comparison to the level of safety actually offered by Tesla.

Supercharger developments

Tesla continues to hit its milestones. The firm just passed 1 GWh charging for the month of June. This equates to the savings of 168,000 gallons of gas and 4.2 million pounds of carbon dioxide offset.

Growth in China and Europe secondary

China and Europe and important growth markets for companies like Ford ( F) and Toyota ( TM), but Tesla’s focus needs to remain in North America. The firm needs to concentrate its capital expenditures on charging stations. Strong demand from this area should ensure Tesla consistently meets revenue targets. For now, the market believes Tesla’s growth story will justify its stock jump in the last year. By comparison, Toyota and Ford stock are drastically underperforming Tesla.

Investors who prefer lower valuation automobile plays might want to stick with Ford or Toyota. Their forward P/E is much lower, at 12 and 10, respectively. Ford grew sales in China by 35%, to 549,256 units for the first half of 2014.

Toyota is also enjoying strong sales. In the U.S., sales for the first half grew by 2.5 percent. Sales growth was strongest for the Corolla and Camry models.


Tesla’s growth story is not about to end any time soon, so the company will appeal to momentum investors. Traditional automobile stocks are less volatile and cost less, and might appeal for investors looking for exposure to the sector.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.24 -1.01%
FB $117.26 -0.68%
GOOG $701.43 0.82%
TSLA $212.10 -4.70%
YHOO $36.94 2.61%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs