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Bear of the Day: Fiat (FCAU)


Let’s face it, automakers have been rocking and rolling recently. With an aging auto fleet coming out of the Great Recession, finding auto deals was easy. That pent up demand finally starting hitting the lots and people all over the place started getting new cars. Heck, I personally know 4 people in my family that have recently purchased brand new autos this year.

But eventually all good things come to an end. It looks like auto sales are beginning to slow down a little and we’ve begun to get a little bit of bad news, including Ford (F) shuttering some plants temporarily. Today’s Bear of the Day is another huge name in the auto business, Fiat Chrysler (FCAU).

Fiat provides passenger cars, light trucks, and light commercial vehicles under the Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia, and Ram brand names; and luxury vehicles under the Maserati brand, as well as after-sales services and parts under the Mopar brand.

Currently, FCAU is clocking in at a Zacks Rank #5 (Strong Sell). A big reason for the unfavorable Zacks Rank is two analysts dropping their earnings estimates for the current quarter, current year and next year over the last week. The bearish sentiment has dropped our Zacks Consensus Estimate from 40 cents to 34 cents for the current quarter, sank next quarter’s numbers from 53 cents to 46 cents, and taken the current year estimate from $1.58 to $1.45.

Shares of FCAU have been chopping lower for quite some time. The stock seemed to have stabilized in July, coming down to carve out a range between $6 and $7, where the stock has bounced between since. The 50-day moving average is providing some topside resistance and confirming the intermediate term downtrend for the stock. The commodity channel index confirms the bearish trend, trading below the zero line at -68.65.

Investors looking for other stocks within the same industry should check out a couple of Zacks Rank #1 (Strong Buy) stocks in Daimler (DDAIF) and BMW (BAMXF).

More Stocks to Sell. Now.

Beyond our Bear Stock of the Day, today's list of 220 Zacks Rank #5 Strong Sells demand even more urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. Many appear to be sound investments but, since 1988, such stocks have actually performed more than 11X worse than the S&P 500.

See today's Zacks "Strong Sells" absolutely free >>.

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