The automobile sector continues to languish. In Europe, Volkswagen (VWAGY) plans to close at least three German plants, jobs, and cut costs. Weakness in the country suggests that U.S. markets will struggle.
Investors should be wary of auto parts suppliers.
Avoid Aptiv (APTV) even after the stock fell from $70 to close at $56.37 last week. Aptiv reported lower sales, while profitability rose from $1.83, up from $1.30 last year. The firm is struggling with a slowdown in the electric vehicle market. Aptiv lowered its revenue guidance from $20.1 billion – $20.4 billion to $19.6 billion to $19.9 billion.
STMicroelectronics (STM) reported Q3 revenue falling by 26.6% Y/Y to $3.25 billion. In Q4, it expects a 2.2% increase in sequential net revenue, to $3.32 billion.
STM stock risks falling below $20. However, the stock trades at a low P/E. Its forward P/E is 16.25 times.
Magna (MGA) posted weak Q3 results. Revenue fell by 3.7% Y/Y to $10.3 billion. Although the stock buyback will help MGA stock, expect the stock to struggle.
Bullish On This Stock
Among the stocks to consider are that in the insurance industry. Root (ROOT) stock nearly doubled after it posted Q3 profits. The firm achieved positive net income for the first time. It benefited from a nearly 50% cut in interest costs after it refinanced and reduced its debt.
