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Are Auto Stocks a Buy after Strong April Sales?

Ford (NYSE:F), General Motors (NYSE:GM) and Chrysler all saw auto sales jump by double digits year-over-year in April, and big-ticket trucks led the charge. Meanwhile, Honda (NYSE:HMC) and Toyota (NYSE:TM) also saw modest gains.

So are auto stocks a buy on this strong news? Maybe not, says Charles Sizemore of the Sizemore Investment Letter.

While there was indeed strong growth in auto sales for April, Charles thinks its more a question of pent-up demand than anything else as Americans continue to drive around clunkers and delay new vehicle purchases.

As such, Charles thinks mass-market car sales aren’t especially encouraging, and that a safe bet would be to think about luxury vehicle brands like Daimler (PINK:DDAIF) that makes the Mercedes-Benz rather than companies that crank out lower-margin compact models for the average Joe.

Check out the video above, and read more about April auto sales below.

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Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.

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Comments
  • joe

    I would say Charles Sizemore is an idiot. Buy Ford if you want to make money -don’t listen to Charles – Look at the cars Ford is producing! How did Toyota do in April??? Explain that Charles

  • joe

    Toyota sales off 1.1% in April. How is that a modest gain???