Ford, GM Motoring Along

Regular readers know that I have been bullish on the auto sector for most of the year. U.S. automakers this week posted their best monthly light-vehicles sales since May 2007, and AutoNation (AN) just had its best sales month in a decade. North American auto plants are running straight out. Forty percent are posting 80 hours or better of utilization per week compared with just over 10% five years ago. Despite strong recent sales, the average age of a car or truck in the U.S. is still north of 11 years old. Given all this, it is time to revisit the investment case for these two automakers.

Ford (F) reported monthly sales that were up more than 12% year over year, beating the consensus call for a 10% gain. More important, truck sales were up more than 18%, led by its F-Series line coming in with a 22% gain. This is very beneficial to profit margins, as automakers make much more per truck compared to car sales. Ford is expanding production and should add more than 6,000 workers this year....268 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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