I recently gave my thoughts on Ford (F) and General Motors (GM) to US News and World Reports’ Lou Carlozo:

    “Ford and GM have both had excellent runs operationally,” says Charles Sizemore, a portfolio manager on Covestor and founder of Sizemore Capital Management in Dallas. “Sales have been robust and profits have followed. Yet Wall Street seems unduly pessimistic about their prospects going forward, pricing in pretty significant sales declines.”

    Another reason for the pessimism revolves around a bad accident that hasn’t even happened yet: skyrocketing interest rates.

    “Yes, rising interest rates — if they ever actually happen — are bad for auto sales, which depend on credit,” Sizemore says. “I get that. But if the economic outlook is as bad as the prices of auto stocks suggest, then U.S. stocks should not be trading at a Shiller price-to-earnings ratio of 26. So either investors are wrong about auto stocks — or they’re wrong about the rest of the market.”

You can read the full article here.

I’m currently long both General Motors and Ford in my Dividend Growth portfolio and expect both to deliver outsized total returns in the year  ahead.

Charles Lewis Sizemore, CFA, is chief investment officer of the investment firm Sizemore Capital Management and the author of the Sizemore Insights blog. As of this writing, he was long AAPL and MSFT. To read more of his work, CLICK HERE NOW.

Disclaimers: If I mention a stock favorably, you should assume that I have a position in it, both personally and in client accounts.  This does not, however, automatically mean that you should own it. I am expressing my opinions in this newsletter, not offering individualized financial advice or soliciting you to buy securities.  See full disclaimer here.