5 Auto Stocks To Buy & 5 To Sell As Markets Move Up

The markets are looking buoyant again with the Dow, S&P 500, and Nasdaq all showing strong double-digit gains since their pandemic lows. So investors may be wondering whether it’s a buyer’s market or a seller’s. As in every other market, this depends on your individual holdings and your specific entry points.

But there are also some common sense principles you can rely on that makes your choices more effective. Today, I’ve picked on one such principle and illustrated with stocks in the auto sector. I chose auto, simply because both good and bad is going on there, with RVs making a strong comeback as people take to road trips and safer holiday alternatives even as certain other areas drop in priority if only because of pandemic-induced thrift.

The principle I’m highlighting here is a quicker return to pre-pandemic business levels. Companies that are able to return quicker are obviously stronger positioned for the next two years than those that aren’t.

5 Stocks to Buy

Meritor, Inc. (MTOR - Free Report)

Meritor is a manufacturer and supplier of automotive parts including integrated systems, modules and components for commercial and specialty vehicles worldwide. It has a leading position in most of its markets. Meritor serves a broad range of original equipment manufacturers (OEMs) worldwide, including commercial truck, trailer, military, bus and coach, other industrial OEMs and certain aftermarkets.

The shares carry a Zacks Rank #1 (Strong Buy). The 2021 EPS estimate of $2.10 is up 32.9% from the pre-pandemic 2020 estimate of $1.58. So it is expected to grow strongly from the pre-pandemic business levels next year, while those mentioned in the “To Sell” section below won’t.

The Shyft Group Inc. (SHYF - Free Report)

Formerly known as Spartan Motors Inc, The Shyft Group is a specialty vehicle manufacturing, assembly, and upfit company serving the commercial, retail, and service specialty vehicle markets. Operating through the Shyft Fleet Vehicles and Services and Shyft Specialty Vehicles segments, it serves vocations, federal, state, and local government entities. The company operates principally in Michigan, Indiana, Pennsylvania, South Carolina, Florida, Missouri, California, Arizona, Texas, and Saltillo, Mexico.

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