In this article, we will provide you with a list of the Top 7 used car stocks to invest in 2022
A used car or a second-hand car is a vehicle that has previously had one or more owners. Used cars/second-hand cars are sold through different outlets, including rental car companies, franchise, and independent car dealers, leasing offices, auctions, buy and pay dealerships, and private party sales.
The auto industry comprises companies that manufacture and distribute cars/vehicles and vehicle parts. The automobile sector has significantly changed since the advent of hybrid and electric technologies, especially in retail cars.
List of the Top 7 Used Car Stocks to Invest in Right Now
Below are the top 7 used car stocks to invest in right now:
#1. Penske Automotive Group, Inc. (NYSE: PAG)
Penske Automotive Group, Inc. is a diversified international transportation services company and one of the premier automotive and commercial truck retailers around the globe; it is headquartered in Bloomfield Hills, Michigan,
Recently, the Penske Group, Inc. announced that it had acquired Genesis of Noblesville and Terry Lee Hyundai, Indiana, increasing the company’s presence in the metropolitan market.
This acquisition is expected to produce a revenue of $80 million. The addition of the Genesis and Hyundai dealerships brings the total anticipated annualized revenue in 2022 to approximately $745 million.
The company recently delivered upbeat sales and profit for the first quarter of 2022. According to the provided earnings report, the company earned $4.76 per share on an adjusted basis, surpassing analysts’ estimates by $1.12.
The Penske Automotive Group, Inc. posted revenues of $6.98 billion, up 20.80% annually, crossing expectations of $652.25 million.
Penske Automotive Group, Inc. is one of the best-used car stocks to invest your money in.
#2. Group 1 Automotive, Inc. (NYSE: GPI)
Group 1 Automotive, Inc. (NYSE: GPI) is an automotive retailer company that offers used and new vehicles, and it also provides service contracts, financing, automotive maintenance and repair services, and vehicle components.
The company is based in Texas. It owns and operates 201 automotive dealerships, 46 collision centers, and 267 franchises across the U.S and the U.K.
Earlier in March, Group 1 Automotive, Inc. announced its acquisition of Charles Maund Toyota in Austin, Texas.
This dealership is predicted to generate $435 million in annual revenues and represents the 16th Toyota store in the Company’s United States portfolio.
On the 27 of April, Group 1 Automotive, Inc. produced its earnings report, which detailed the automotive company’s earnings for the fiscal first quarter of 2022.
The company reportedly grew revenues of $3.84 billion for the quarter, up 27.71% on a year-over-year basis, and overperformed revenue prediction by $69.45 million.
The automotive company reported earnings per share of $10.92, crossing EPS prediction by $1.49.
#3. KAR Auction Services, Inc. (NYSE: KAR)
KAR Auction Services, Inc. (NYSE: KAR) provides used vehicle auctions and related vehicle remarketing services for the automotive industry. KAR Auction Services is headquartered in Carmel, Indiana.
The auction company sold nearly 2.6 million cars valued at over $40 billion through auctions and produced a revenue of approximately $2.3 billion in 2021.
On the 10 of May, KAR Auction Services, Inc. completed its sale of the ADESA U.S. physical auction business to Carvana Co. (NYSE: CVNA). Initially announced in February, it includes all ADESA U.S. physical auction operations and sites.
The completed transaction advances the auction company’s digital D2D strategy, enhances its financial profile, and better positions the company and its industry-leading digital marketplaces for accelerated growth.
#4. CarGurus, Inc. (NASDAQ: CARG)
CarGurus, Inc. (NASDAQ: CARG) is an automotive research and shopping website based in Cambridge, Massachusetts.
The website assists users in comparing local listings for new and used cars and contacting sellers.
Needham analyst Chris Pierce reduced his price target on CarGurus, Inc. on the 10 of May to $40 from $52 but maintained a buy rate on the company’s shares.
According to the analyst, the company reported better than expected Q1 results, but its Q2 guidance suggests higher planned spending. However, he adds that he still views CarGurus, Inc. as a compelling investment opportunity given its positive adjusted EBITDA profile, subscription model, and an “untaxing multiple” at current prices.
CarGurus, Inc. (NASDAQ: CARG) posted an EPS of $0.36 by the end of the first quarter of 2022, which beat analysts’ prediction by $0.01.
Revenue for the quarter was recorded at $430.62 million, a staggering increase of 151.29% compared to the year-ago quarter, surpassing market prediction by $37.95 million.
#5. Sonic Automotive, Inc. (NYSE: SAH)
Sonic Automotive, Inc. (NYSE: SAH) was Incorporated in 1997 and is one of the biggest automotive retailers companies in the U.S. company operates over 100 dealerships across 14 states and 25 metropolitan markets.
The Automotive company’s EchoPark unit is the primary growth engine of the firm. The auto retailer saw a record of used-vehicle unit sales of 77,836 for 2021, up 36.3% year-over-year.
The Sonic company reported financial results for the first quarter of 2022 on the 28 of April, with quarterly revenue of $3.6 billion, up 28.8% on a year-over-year basis.
The company agreed to a quarterly cash dividend of $0.25 per share, the same as the previous one, which will be payable on the 15 of July to all stockholders of record on the 15 of June 2022.
Sonic Automotive, Inc. is a notable stock pick, and by the end of Q4 2021, 26 hedge funds held long positions in the Sonic company, worth roughly $139.12 billion.
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#6. Asbury Automotive Group, Inc. (NYSE: ABG)
Asbury Automotive Group, Inc. (NYSE: ABG) is one of the biggest automotive retailers in the U.S that provides used and new vehicles, as well as maintenance services, car repair and replacement parts, and collision repair services.
The Asbury Automotive company’s strategic acquisitions in 2021 have set it on pace to produce $16 billion in revenue in 2022, a 62% increase over the previous year.
Asbury Automotive Group, Inc. announced that its fiscal first quarter of 2022 revenues came in at $3.91 billion, up 78.38% on a year-over-year basis, and surpassed the market by more than $2.64 million.
The Automotive company also reported an EPS of $9.27, beating expert prediction by $0.33.
#7. CarMax, Inc. (NYSE: KMX)
CarMax, Inc. (NYSE: KMX) is a used vehicle retailer that operates 2 business segments: CarMax Auto Finance and CarMax Sales Operation. It is based in Virginia and is one of the world’s largest auctioneers of vehicles, with 220 locations across the country.
CarMax, Inc. (NYSE: KMX) sold over 750,000 vehicles during the fiscal year 2021, maintaining one of the giant used-vehicle financing arms, with more than 1 million customers/users accounts amounting to $13.85 billion in receivables. CarMax, Inc. expects to increase this amount to 2 million by 2026, presenting over 5% of the used auto market share in the U.S.
FAQ
Will Used Car Prices go up in 2022?
According to the forecast given by J.D. Power forecasts, it predicted that used-vehicle prices will drop by the end of 2022 and into 2023.
Since it is a seller’s market, many vehicle companies have not only raised prices but have reduced the number of financial discounts and incentives.
Will Used Cars go Down in 2022?
Most analysts predicted that used cars will drop between the end of 2022 and the beginning of 2023; we should also acknowledge that they might be correct or wrong.
Will Used Truck Prices Drop in 2022?
According to the forecast given by J.D. Power forecasts, it predicted that used-vehicle prices will drop by the end of 2022 and into 2023.
Since it is a seller’s market, many vehicle companies have not only raised prices but have reduced the number of financial discounts and incentives.
Is Now a Good Time to Buy a Car in 2022?
2022 might be a good time to buy a car for those with a vehicle to trade in. A high trade-in price implies added capital that can help decrease the finance share of purchasing a new car.
Will Used Car Prices Drop in 2023?
Shoppers are paying more for used cars than ever before, but experts predicted that used-car prices will eventually drop following improvements in new car production, likely by the end of 2022 or early 2023.
Are Second-Hand Car Prices Falling?
Wholesale used car prices declined 1% in April from March, indicating that vehicle prices may drop.
Used car prices hit an all-time high of $28,206 in December 2021, 43% higher than December 2019, right before the pandemic.
Watch the video below to know the best used car stocks to invest in:
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