Delphi Automotive Provides a Chance to Benefit From Self-Driving

Shares of automaker Bayerische Motoren Werke -- better known by its acronym, BMW -- rose more than 4.5% on Monday, probably thanks to reports that the company is venturing further into autonomous-vehicle technology.

The company is making an effort to compete with ride-hailing companies such as Uber.

But automotive-parts manufacturer Delphi Automotive (DLPH)  offers a better bet on self-driving taxis. The company has a promising self-driving initiative with the Singapore government, and its shares are trading at a discount. 

Delphi Automotive shares were about flat in Monday trading. 

First of all, the latest news is that BMW said Friday that it will begin testing about 40 vehicles with autonomous capabilities in Munich, Germany, beginning next year, with the likelihood of spreading the experiment to other cities. Each car will have a trained test driver aboard to prevent accidents.

It is all part of BMW's larger scheme to create its own fleet of premium and luxury taxis. By making this fleet self-driving, BMW could see a big boost in revenue. 

Traditional car companies have been trying to catch up with the popularity of ride-hailing application Uber. And Uber has been courting deals with automakers, including Ford Motor, General Motors and Toyota Motors, to take the next step in its business, which is to operate a fleet of self-driving vehicles.

Uber's rise has been stratospheric, as have those of its competitors Juno and Lyft.

And though investors would like to play this trend directly, unfortunately, it is doubtful that these ride-hailing companies will go public themselves any time soon, despite rampant speculation. Push-back from traditional taxi companies, as well as government regulation, are the main challenges.

Instead, these private enterprises are more than likely to be bought by a larger corporation, perhaps even BMW itself, as well as any of the other major automakers.

Meanwhile, U.K.-based Delphi Automotive is one of the world's largest auto parts suppliers. It is working with the Singapore government to put a fleet of autonomous taxis on the street.

Singapore suffers from abysmal traffic problems. The island is only 30 miles long but home to 5.5 million people.

So self-driving taxis would be a major improvement. Delphi Automotive has already had success with a self-driving Audi model, which drove itself from New York to San Francisco with just 1% human intervention.

Delphi Automotive's Singapore fleet is expected to begin its three-year taxi test next year. And it is likely that the company will also test self-driving taxis in the U.S. soon. As these developments play out, investors could see a lift in their portfolios.

The company has had a rocky year so far, with its stock down more than 16.5%.

However, expect a tidy turnaround in this automotive play once its tests bear fruit. View depressed prices as a chance to get in at a discount.

---

85% Accurate Trader gives his Personal Guarantee: "Give Me 9 Minutes a Week and I Guarantee You $67,548 a Year."

With Delphi, self-driving technology is close to becoming an everyday reality. But what if I told you there is a way to make $67,548 per year - or more - without stocks, just by following this simple step-by-step process? The trader who is sharing this secret has been right more than 8 out of 10 times, turning $5,000 into more than $5 million for himself. Click here to see how easy it is to follow his lead and collect thousands of dollars in "Free Money" every month.

The author is an independent contributor who at the time of publication owned none of the stocks mentioned.

More from Stocks

Week Ahead: Trade Fears and Stress Tests Signal More Volatility To Come

Week Ahead: Trade Fears and Stress Tests Signal More Volatility To Come

3 Great Stock Market Sectors Millennials Should Invest In

3 Great Stock Market Sectors Millennials Should Invest In

Why Millennials Are Ditching Stocks for ETFs

Why Millennials Are Ditching Stocks for ETFs

Trump's 'Space Force' Could Launch a $1 Trillion Industry, Morgan Stanley Says

Trump's 'Space Force' Could Launch a $1 Trillion Industry, Morgan Stanley Says

Abiomed Stock Should Rise Some 12% From Here, Piper Jaffray Analyst Says

Abiomed Stock Should Rise Some 12% From Here, Piper Jaffray Analyst Says