According to aggregated portfolio data, the five most broadly held companies in the autos industry group are General Motors Co. (GM, Financial), CarMax Inc. (KMX, Financial), BorgWarner Inc. (BWA, Financial), Dana Inc. (DAN, Financial) and Aptiv PLC (APTV, Financial).
The automobile industry includes companies engaged in the design, production and marketing of passenger automobiles and lightweight trucks. The industry is highly sensitive to changes in the business cycle: demand for automobiles can sharply decline during economic downturns. Despite this, the most broadly held portfolio has outperformed the Standard & Poor’s 500 index benchmark over the past 10 years.
General Motors
Twenty-three gurus own shares of General Motors, with a combined weighting of 33.38%. Gurus with large holdings in GM include David Einhorn (Trades, Portfolio), Bill Nygren (Trades, Portfolio) and Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) CEO Warren Buffett (Trades, Portfolio).
On Tuesday, shares of several major auto manufacturers rose on China’s plan to cut tariffs on U.S. vehicles: CNBC columnist Fred Imbert said the Chinese government is “moving toward” reducing the tariff from 40% to 15% according to a Bloomberg News report. Despite paring gains during the afternoon, GM traded at an intraday high of $35.75, up 3.86% from the previous close of $34.42. Other auto manufacturers that rose on the news include Ford Motor Co. (F, Financial) and Fiat Chrysler Automobiles NV (FCAU, Financial).
GuruFocus ranks the Detroit-based company’s profitability 6 out of 10: even though the company’s net profit margin of 0.56% underperforms 88% of global competitors, GM’s three-year EBITDA growth rate of 32.90% is near a 10-year high and outperforms 89% of global auto manufacturers.
CarMax
Fifteen gurus own shares of CarMax, with a combined weighting of 33.38%. Gurus with large holdings in CarMax include Ruane Cunniff (Trades, Portfolio), Chuck Akre (Trades, Portfolio)’s Akre Capital Management and Tom Gayner (Trades, Portfolio).
GuruFocus ranks CarMax’s profitability 7 out of 10 on several positive indicators, which include expanding profit margins and a return on equity that outperforms 85% of global competitors. CarMax’s business predictability ranks three stars out of five on consistent revenue and earnings growth over the past 10 years.
BorgWarner
Fourteen gurus own shares of BorgWarner, a supplier of auto parts.
The Auburn Hills, Michigan-based company operates two business segments: Engine and Drivetrain. GuruFocus ranks BorgWarner’s profitability 8 out of 10 on several positive investing signs, which include a strong Piotroski F-score of 7 and operating margins that are outperforming 83% of global competitors.
Dana
Thirteen gurus own shares of Dana, a supplier of driveline, sealing and thermal-management technologies for vehicles with both conventional and alternative-energy powertrains.
GuruFocus ranks Dana’s profitability 7 out of 10: while operating margins are near a 10-year high of 7.93%, the company's return on equity outperforms just 79% of global competitors.
Aptiv
Thirteen gurus own shares of Aptiv, a U.K.-based auto parts company.
GuruFocus ranks the company’s profitability 7 out of 10: even though revenues have declined 2.2% per year over the past three years, Aptiv’s operating margin of 11.46% outperforms 77% of global competitors while its return on equity ranks higher than 96% of global competitors.
Disclosure: No positions.
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