3 Auto Stocks to Buy to Rev Up Your Returns in 2024

Rick Orford

January 28, 2024 3 min read

2023 was a challenging year deciding which auto stocks to buy. Consumers and companies faced soaring used vehicle prices, prolonged strikes and the government’s push for electric vehicle adoption amid infrastructure struggles. Now that 2024 is starting, the sector is ripe for investment potential.

Innovations with AI, newer vehicle design, and autonomous driving may set a new standard for transportation. Consumers could have a better road travel experience, efficient fuel and energy management and multiple leaps forward in the autonomous driving space. Every investor’s mission now will be finding which auto stock will be part of the upcoming revolution. If you ask us, three automotive stocks offer great potential for innovation and growth.

BorgWarner (BWA)

Source: Jonathan Weiss / Shutterstock.com

The first auto stock on our list is a technology solutions provider for combustion, hybrid, and electric vehicles. BorgWarner (NYSE:BWA) caters mainly to light vehicle OEMs (original equipment manufacturers) through four main business segments: air management for its turbo, boosters, and timings systems; drivetrain & battery system for batter and torque management products; ePropulsion for its electronic components and inverters; and electric hybrid systems for onboard chargers, DC/DC converters, and integrated high-voltage boxes.

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BWA’s latest financials spelled an impressive third quarter. Net sales increased 12%, and adjusted net earnings per diluted share grew 22.5% YoY. Its updated full-year guidance anticipates a YoY organic sales increase of 12% to 14%. The company has also highlighted its agreements to supply high voltage coolant heaters and inverters for Volvo Cars’ next-generation electric vehicles. This is its bidirectional onboard chargers supply deal for a premium North American automaker’s electric vehicle platform. It increased business for hybrid applications with a premium European OEM as a testament to its growing advancement in the EV sector.

Rounding it all up shows the company’s strong position in a growing market and potential for substantial future growth for investors looking for auto stocks to buy.

Visteon (VC)

Visteon logo on the website homepage. VC stock.

Source: Casimiro PT / Shutterstock

Next on our list of auto stocks is an automotive technology firm that offers solutions that enable the digital, electric and autonomous evolution of automotive industry clients. Visteon (NASDAQ:VC) is considered a leader in analog-to-digital cockpit domain controllers and analog-to-digital transition of automotive cockpits. Its AllGo™ availability in the App Store and new digital cockpit programs show a focus on an evolving automotive landscape.

VC’s latest financials showcased a base sales growth of 9%, marking its 18th consecutive quarter of market outperformance. The company also reported a 12.6% YoY increase in adjusted EBITDA from sales. In addition, Visteon secured $1.8 billion in new business throughout the year. It also held significant product launches across various vehicle models like Volvo EX30, Renault Trucks, Mercedes EQE, and more. The company anticipates more robust sales and cash flow with the updated guidance. Hence, it is one of our top automotive sector stocks to buy.

Modine (MOD)

Mechanic Working Under Vehicle in a Car Service

Source: Gorodenkoff / Shutterstock.com

The last company on our list may not be exclusively an automaker, but it operates in the automotive industry. Modine (NYSE:MOD) offers thermal management systems specializing in engineered heating and cooling components. Customers include industry giants BMW, Caterpillar, Mercedes-Benz and Ford Motor Co.

Modine’s latest quarter reported excellent results. Operating income surged 79%, while adjusted EBITDA grew 59% YoY. Doubled data center sales and decreasing debt drove this growth. This led to a more positive 2024 outlook that anticipates a 6% to 11% projected increase in net sales and a 34% to 41% boost in adjusted EBITDA. Its continuous developments putting customers at the heart of its products make MOD a worthy candidate for any portfolio seeking exposure to auto stocks.

On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.