There's a fair bit of choice for investors when it comes to the automotive industry. But not all shares from the industry are equal, with some having significantly better prospects than others.
Three shares in the industry that I've taken a liking to recently are as follows:
Automotive Solutions Group Ltd (ASX: 4WD)
This aftermarket products provider for the four-wheel drive market hasn't had the best of times since listing on the ASX in December at $1.00. Its shares are now trading down 11% at 89 cents and potentially in bargain territory. One thing in particular I like about the company is the market it operates in. Due to the above trend sales growth in the 4X4/SUV category, I believe the company should see increasing demand for its products over the next few years.
AP Eagers Ltd (ASX: APE)
Last month automotive retail group AP Eagers announced that it will achieve its sixth consecutive record profit result for the year ended 31 December 2016. Statutory net profit before tax is expected to come in at $141.4 million, around 17% higher than last year and ahead of previous guidance. As well as expanding its dealership network, I was impressed to see record like-for-like sales growth driving the strong result. At 19x earnings its shares aren't the cheapest in the industry, but I believe its high-quality business warrants the premium.
MotorCycle Holdings Ltd (ASX: MTO)
Last year the owner and operator of the largest motorcycle dealership network in Australia smashed its prospectus forecast when it posted annual net profit after tax growth of 74% to $8 million. Impressively its new motorcycle sales grew by 17.5% to 7,538 units during the period, compared to the motorcycle market growth of approximately 1.8%. I believe FY 2017 will be a similar story, which could make it an opportune time to grab its shares.
