Car Dealer Stocks: The Ultimate Contrarian Play?

Are the stocks of automobile dealers the ultimate contrarian play? With fears of a recession, oil near its all time high, and many consumers cutting back on spending due to rising interest rates on their adjustable mortgages. Maybe now is the time to take a closer look at these stocks, especially since several of these companies deal in used cars, which makes them semi-recession proof.

All of the following companies have market caps over $500 million:

Group 1 Automotive (GPI) is a Houston, Texas-based company which sells new and used vehicles. The stock has a P/E of 8.61, and a PEG of 0.66.

Asbury Automotive Group (ABG) is a retailer of both new and used automobiles. It sells directly to customers, and by auction. The stock has a P/E of 10.73, and a PEG of 0.76.

Sonic Automotive Inc. (SAH) is a Charlotte, North Carolina-based company which operates over 170 automobile dealership franchises. The stock has a P/E of 10.44, and a PEG of 0.83.

Penske Automotive (PAG) is a Michigan-based company which operates over 300 retail automotive franchises. The stock has a P/E of 14.98, and a PEG of 1.11.

Autonation Inc. (AN) is a retailer of new vehicles, used vehicles, vehicle maintenance and repair services. The stock has a P/E of 10.93, and a PEG of 1.15.

Carmax Inc. (KMX) is a Virginia-based retailer of used vehicles The stock has a P/E of 22.61, and a PEG of 1.34.

Copart Inc. (CPRT) is a remarketer of vehicles using the Internet. It primarily works with vehicle dismantlers for salvage. The stock has a P/E of 26.32, and a PEG of 1.63.

Rush Enterprises, Inc. (RUSHB) is a Texas-based company which operates truck dealerships. The stock has a P/E of 12.15.

Disclosure: The author does not own any of the above.