I follow Doug Kass on Twitter, and he is very much a Hidden Levers kind of guy – macro ideas driving trading and investment decisions. Yesterday he tweeted that he was picking up Ford (F) and GM (GM) on his hunch that Oil Prices would soon fade. I have previously said the Libya tensions were mostly baked in for Oil prices. And today, the headlines are still rife with words like Libya and uncertainty, yet Oil prices are receding quietly. And the smart money is exiting the building.
I used Hidden Levers charting to put Doug’s plays to the test. You can see that the automakers were hit pretty bad, and are springing back, even just on the little tick down in Oil Prices. I found a couple other auto industry plays using the Hidden Levers screener that have significant inverse correlation to Oil:
Commercial Vehicle Group (CVGI) has an Oil Impact of -0.46
Strattec Security Corp (STRT) has an Oil Impact of -0.20
Automakers are the obvious plays, but if you miss their rebound, don’t forget about the auto parts companies. They benefit from normalizing Oil Prices too.
Disclosure: No positions