Sponsored By:

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.

Related Reading

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.

Get The Slant delivered to your inbox every day!