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Even with Tesla's Model X, Ford is the Stock to Buy

While the stock market is having a tough time the last couple of weeks, Auto sales have continued to be strong. The big US carmakers announced they are crushing analyst sales estimates. Sales have exceeded the 17 million seasonally adjusted annual rate for the second month in a row.

This is the first time this has happened since I had a full head of hair and a clean shave. The summer of 2005. Handsome devil you.

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Ford's ( F ) sales are up 23% year-over-year, while GM ( GM ) is a seeing 12.5% increase. Part of the increase can be chalked up to looser lending requirements. Heck, last time I bought a car the sales guy tried to sell me a Nissan GTR with zero down. I did the responsible thing and bought a C6 Corvette. No wonder the Tilted Kilt employee parking lot is filled with new Mustangs. Don't worry Brittney, I'm sure you'll keep this job for the six years on this auto loan, uhhh, sign here, press hard, two copies.

Then you have the aging fleet here in the US. The average age of light vehicles on the road in reach an all-time high of 11.5 years at the end of 2014. Nowadays new-vehicle buyers are holding onto their cars for 6.5 years on average. That's more than a two-year increase since the first quarter of 2006. Hear that Mom, you can go ahead and trade in that 1998 Dodge Durango now. It's time to let go.

Looking for suggestions, well Tesla ( TSLA ) is looking for the more demanding consumer to step inside its Model X SUV. Earlier this week Tesla delivered the first six Model X SUVs to people we all probably hate. Too cool for a BMW X6? Is the Range Rover too common? You can take your $130,000 and hop into this sweet looking SUV with falcon doors that lift up like the wings of a bird.

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The big drawback of doors like this on previous vehicles was that they require a lot of space around them to open. So you can't park anywhere near other people. Or rollover. Cuz you'll probably die. But Tesla engineers say the doors can open with as little as 12 inches on each side. And to save your toes and fingers from being smashed, capacitive sensors in the edges of each door sense obstacles within 2 to 4 inches and stop the doors from closing.

As for performance, Tesla says the Model X will run the quarter in 11.7. That's faster than just about any car you've ever been in. It puts it up there with the BMW M5 and Corvette Z06. Those are serious numbers. Zero to sixty in 3.2 seconds on the model equipped with ludicrous mode. It also fits seven comfortably so you can put six other lives in danger when you're weaving through traffic at its 155mph top speed.

If you're looking to cash in on the auto sales trends, then Ford is the way to play it. Ford is a Zacks Rank #2 Buy. A big reason for the ranking is five analysts have upped earnings estimates for the current year over the last sixty days. The bullish attitude has pushed up our Zacks Consensus Estimate from $1.57 all the way to $1.69 per share. Shares are currently trading near the August lows in the mid-13s.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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