Ford Motor Company (F), Harley-Davidson, Inc. (HOG): The Auto Sector Is More Than Cars and Trucks

Alternatives

As mentioned before, the other ways to play the domestic vehicle sector are Ford Motor Company (NYSE:F) and General Motors, which are more speculative but could definitely pay off huge for shareholders.  Of course there are newcomers like Tesla, and even though I love Tesla, I would put it in an entirely different category.  Tesla Motors Inc (NASDAQ:TSLA) is a play on clean technology and the mass-marketability of electric vehicles, which I actually think it just proved by announcing that it anticipates turning a profit this year.  Although I think Tesla Motors Inc (NASDAQ:TSLA)’s shareholders will do very well in the long run, I would not consider it a pure “automotive sector” play.

General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F) are the numbers one and two U.S. car and truck manufacturers, and the major difference between the two as investments is the perceived risk level that is taken on.  Out of the two, I think ford is the best value right now, especially when compared to its foreign counterparts.  I wrote a full post about Ford Motor Company (NYSE:F) a couple of weeks ago, but to summarize, Ford Motor Company (NYSE:F) trades at just 9.5 times forward earnings with projected forward growth of upwards of 20%.  The negatives (as opposed to Harley-Davidson) include higher competition and less financial stability.  As mentioned before, Harley-Davidson has a brand loyalty that is tough to beat.

So, Is It Worth A Look?

Harley-Davidson, Inc. (NYSE:HOG) is definitely a great company with an extremely strong brand name, however in my opinion it is still a bit expensive for the risk you take in owning it.  I would wait for a pullback to around 17 times earnings (around $46) before considering jumping in, which is right around the historical average.

Matthew Frankel has no position in any stocks mentioned. The Motley Fool recommends Ford and Tesla Motors . The Motley Fool owns shares of Ford and Tesla Motors .