Sell Your Automakers

Get Out of these Stocks Now!

July 8, 2008

Did you know that approximately 70% of the 21 million barrels of oil consumed each day in the U.S. is used for transportation? Consumers foot the costs every time they step up to the pump, which is part of the problem for U.S. automakers. Car companies have been hard-hit by soaring gasoline prices as more and more Americans are shifting to more fuel-efficient modes of transportation.

Last week, Ford (F) reported a 55% drop in sport utility vehicle sales from a year earlier. Its full-size F-series pickup – the best selling vehicle in the U.S. for 26 years straight – is off an unsettling 40%.

High gasoline prices have devastated the U.S. auto industry, since demand for gas-guzzling truck and SUVs has fallen off considerably.

In June, the following companies saw significant drops in sales:

• General Motors' (GM) sales dropped 18%
• Ford's (F) sales dropped 28%
• Chrysler's (DAI) sales dropped 36%
• Toyota's (TM) sales dropped 21%

Only Honda saw a small 1.1% increase in June sales. But no matter how you slice it, sales of trucks and SUVs are in a free fall, pressing vehicle manufacturers to offer incentives to move their existing inventories out and switch to more fuel-efficient models as fast as possible. Honda's got the head start, but not by much.

It saddens me to say this, but unload your automakers until further notice. My PortfolioGrader Pro tool rates them as D stocks. If you want to see if other stocks in your portfolio aren't making the grade, make sure to check out PortfolioGrader for FREE right now!

But more importantly than stocks to avoid are stocks to buy. After all, we're in the market to make money, right? Don't think the whole market is a bust just because stocks in Detroit are scraping the bottom of the barrel. My Blue Chip Growth Buy List has six stocks up more than 160%! If you want to know what stocks to buy now, subscribe to Blue Chip Growth today!