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Mark Hulbert: Car companies stuck in slow lane

CHAPEL HILL, N.C. (MarketWatch) — Don’t bother.

TRADING STRATEGIES: April


MarketWatch photo illustration


While automobile makers are feeling more upbeat these days, investment
opinion on the industry is mixed.

Cars on the road to recovery

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(Slideshow)

Car companies stuck in slow lane

Car industry to take a turn for the better

Go long GM for high-octane profits

Ford is ready to step on the gas

That, in essence, is the consensus opinion of the automobile industry from the top performing advisers I monitor. There are many other sectors that they believe to be far more attractive.

To come up with what the top performers are saying, I relied on the criteria I utilize for my companion service, Hulbert On Markets. An adviser is deemed to be a “top performer” if he jumps over two hurdles: First, he must in the Hulbert Financial Digest’s ranking have beaten a buy-and-hold in the stock market over the last 15 years. Secondly, he must be among the 15 of these long-term market beaters with the best returns over the last 12 months.

The accompanying table lists how many buy recommendations come from these 15 top advisers for any of four prominent auto makers.

Number of buy recommendations from top performers Ford

F, +1.67%

  1 General Motors

GM, +1.71%

  1 Honda Motors

HMC, +2.70%

  0 Toyota

TM, +3.24%

  0

To put the data in this table into perspective, the stock that currently is most recommended by select group of top performers — Pfizer — is recommended for purchase by 7 (or about one of every two of them, on average). The two auto makers that garner any buy recommendations from the top performers don’t come anywhere close to that kind of popularity: Currently there are 75 other stocks in addition to Pfizer that those top performers like more.

Note carefully, furthermore, that there are no other auto makers besides these four that the top performers like any better. The simple fact is that they are not crazy about the industry, period.

What industries do the top performers particularly like right now? The table below shows which have received the greatest number of upgrades in recent weeks from those top performers.

As you can see from the sectors listed in the table, there is nothing even remotely associated with or correlated with the auto industry.

Of course, this doesn’t mean that this industry won’t do well, or that it automatically should be avoided. But you should know that if you do decide to invest in it, you will not have much, if any, support from the top performing advisers.

Click here to learn more about the Hulbert Financial Digest.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of FinancialPress.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://financialpress.com/legal-disclaimer/.

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