Investing in auto stocks does not prevent market participants from simply choosing between mass market players or electric vehicle innovators. There is a high-quality business that does not fit these descriptions and should not be overlooked.
This is one of the best auto stocks to hold for the next 10 years.
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ferrari (NYSE: RACE) It is unique in the industry because it does not try to sell as many cars as possible. Instead, management is intensely focused on maintaining the strength of the brand, which exudes luxury, status and scarcity.
This winning strategy results in a solid pricing powerwith some models, such as the F80, fully booked despite selling for seven-figure sums. It’s good to see that over the last five years, Ferrari has reported a fantastic average quarterly operating margin of 26.9%, which is the envy of its peers.
I think investors overreacted after the company revealed its 2030 outlook as it implied a slowdown in revenue growth. It’s likely that Ferrari was being conservative with its forecast.
The stock is now trading 34% below its all-time high (as of January 29). However, it is time for investors to take control and add the business to their portfolios. The current price-earnings ratio of 34.3 is significantly cheaper than the average of the last five years.
Ferrari can be a winning investment over the next decade.
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