The U.S. auto industry is on track to sell upwards of 13.8 million vehicles in 2012, and both Ford
While there's still strong demand out there, warm weather earlier in the year might have pulled some sales forward, and despite the robust numbers, Ford's shares have fallen 26% from their highs while GM is down by a third. Even Toyota has lost more than 12% from the 52-week peak it hit in March.
Get your motor running
Over on Motley Fool CAPS, the industry screener lists 55 stocks under "automotive," of which less than two dozen carry well-respected four- and five-star ratings. One of those that floats to the top is Westport Innovations
Part of the growth thesis in Westport has been the abundance of domestic natural gas and its low price. When oil is hitting $100 a barrel, natural gas that goes for just $2 or $3 per million BTUs is a significant discount. Prices will eventually rise as drillers cut back rigs and production, but there will always be a bias in favor of gas.
With Clean Energy Fuels
Still, there's plenty of room for both. Nat gas has powered a fleet of vehicles in industrial uses -- forklifts are a prime example -- and Caterpillar
It's these partnerships that attract CAPS member keithelane, who notes that "Westport has done a great job of locking down several avenues for future success with Cummins, Ford, Volvo, Weichai, and now CAT." With the sell-off in its shares, he believes investors have an excellent entry point.
In the rearview mirror
One highly rated stock that's gone in the other direction from Westport is auto-dimming mirror maker Gentex
The big catalyst for Gentex, however, is the adoption of rear-camera displays, or RCDs, that promise to be a technological advance. The mirror maker's stock got crushed a few months back because it issued guidance that showed flat sales for 2012, and that was predicated on delays in implementing new regulations for U.S. carmakers.
Part of the problem for Gentex is the location of the display. The NHTSA says the cheapest spot to put the display is in a car's existing video screen. Gentex thinks the rearview mirror is best. Despite the high cost to the auto industry in terms of the number of lives saved -- industry analysts peg it at about $20 million per life -- it doesn't seem the regulators will abandon the rule, so Gentex ought to be able to cash in when they're finally implemented.
With 94% of the CAPS All-Stars rating Gentex betting it will outperform the broad market indexes, it appears they're looking out the windshield at what is to come and not in the rearview mirror of what has gone on before. Add the mirror maker to your own watchlist, then let me know in the comments section below or on the Gentex CAPS page if you agree that their view is not distorted.
The ball's in your court
Gentex isn't the only American company eyeing growth in emerging markets. In fact, the Motley Fool's top analysts have identified a few American companies finding lucrative opportunities abroad. Learn more about these companies right now with our new free report, "3 American Companies Set to Dominate the World." It's completely free for Fool readers, but only for a limited time -- so grab your copy now.
Fool contributor Rich Duprey holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Gentex, Ford Motor, and Westport Innovations. Motley Fool newsletter services have recommended buying shares of Cummins, Clean Energy Fuels, Westport Innovations, General Motors, and Ford Motor. Motley Fool newsletter services have recommended creating a synthetic long position in Ford Motor. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.