5 Most Undervalued Auto Stocks to Buy According to Hedge Funds

4. Lithia Motors, Inc. (NYSE:LAD)

Latest P/E Ratio: 7.19

Number of Hedge Fund Holders: 38

Based in Medford, Oregon, Lithia Motors, Inc. (NYSE:LAD) is one of the largest global automotive retailers providing a wide array of products and services throughout the vehicle ownership lifecycle. Founded in 1946, it currently owns more than 300 stores supporting over 50 automotive brands.

On October 2, Lithia Motors, Inc. (NYSE:LAD) announced a revised agreement on improved terms to enter into a strategic partnership with Pinewood Technologies and to acquire Pendragon’s UK motor division and vehicle management division. The total cash consideration for the acquisition of Pendragon’s businesses and a 16.7% stake in Pinewood Technologies amounts to £397 million.

As part of the transaction, the remaining business of Pendragon, comprising of the Pinewood DMS platform, will remain listed on the London Stock Exchange under Pinewood Technologies plc. The strategic partnership includes acquisition of 16.7% stake, and the adoption of Pinewood Technologies platform across the UK operations of Lithia Motors, Inc. (NYSE:LAD).

Like other stocks such as Ford Motor Company (NYSE:F), Aptiv PLC (NYSE:APTV), and LKQ Corporation (NASDAQ:LKQ), the shares of Lithia Motors, Inc. (NYSE:LAD) are among the most undervalued auto stocks to buy according to hedge funds.