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Hedge fund managers are the smartest investors around, and they have more experience in choosing stocks than ordinary investors. They also have vast teams of analysts researching stocks or talking to the experts about the latest developments not in the public domain yet. We monitor hedge funds portfolios and allocations based on their quarterly reports. Below we compiled a list of 10 automakers that most hedge funds are most bullish about.

Company

Ticker

No. of hedge fund

General Motors Company

GM

71

Ford Motor Credit Company

F

43

Visteon Corporation

VC

37

Dana Holding Corp

DAN

34

Lear Corp

LEA

33

WABCO Holdings Inc.

WBC

29

Oshkosh Corp

OSK

25

TRW Automotive Holdings Corp

TRW

24

Swift Transportation Company

SWFT

21

Navistar International Corp

NAV

19

General Motors Company (GM): The global automotive company has lost 45% so far in 2011. The company has a market cap of $29.8 billion. It trades at a forward PE of 5.04 and an expected EPS growth rate of 11%. GM is the most popular stock in the list. Seventy one hedge funds invested in GM at the end of the third quarter. David Einhorn’s Greenlight Capital was GM’s largest hedge fund stakeholder at that time. The firm boosted its position by more than 3 times and had 14.73 million shares in GM. Other famous hedge fund managers including George Soros, Marc Lasry, and Jeffrey Tannenbaum had positions in the stock.

Ford Motor Company (F): The cars and trucks producer has a market cap of $38 billion. Ford has lost 40% year to date. The stock has a 5.62 forward PE and its EPS is expected to grow by 8% annually in the next five years. Forty three hedge funds held Ford in the third quarter. Jonathon Jacobson’s Highfields Capital Management had 34.56 million shares in the stock at the end of September.

Visteon Corporation (VC): VC has a market cap of $2.4 billion. The stock lost 32.72% year to date. It currently has a 13.52 forward PE and a 12% expected EPS growth rate. Among 37 hedge funds that had VC in their portfolios, Christopher Pucillo’s Solus Alternative Asset Management had the largest stake and reported to own 2.24 million shares.

Dana Holding Corporation (DAN) provides parts for light and heavy vehicle manufacturers. The stock has a market cap of $1.58 billion, and has declined 35% year to date. It’s trading at a forward PE of 6.73, and has an extremely high beta of 4.46. Thirty four hedge funds invested in DAN during the third quarter. Jeffrey Altman’s Owl Creek Asset Management had the most, with 7.72 million shares in the stock.

Lear Corporation (LEA) provides automotive seat systems and related components to manufacturers. The company has a market cap of $3.7 billion. The stock has lost 24% in 2011. Currently LEA has a 6.94 forward PE and a 13% expected EPS growth rate. In addition, the stock has a 1.40% dividend yield. Among 33 hedge funds that had LEA during the third quarter, John Paulson’s Paulson & Co owned the largest chunk with a 4.63 million shares position.

WABCO Holdings Inc. (WBC) provides electronic, mechanical and mechatronic products to auto manufacturers. The company has a market cap of $2.58 billion, and trades at a forward PE of 8.64. Its EPS is expected to grow at 15% in the next five years. Twenty nine hedge funds had WBC in their portfolios. Stephen Mandel’s Lone Pine Capital had 4.40 million shares at the end of the third quarter.

Oshkosh Corporation (OSK) is a vehicle body designer and manufacturer. The company has a $1.91 billion market cap. The stock has lost 40% so far in 2011. OSK has a 14.84 forward PE and an expected EPS growth rate of 0.5%. Hedge fund legend Carl Icahn had 8.67 million shares in OSK.

TRW Automotive Holdings Corp (TRW) is a diversified supplier of automotive parts. The stock has a market cap of $3.57 billion and has lost 45% year to date. The stock currently trades a 4.27 forward PE and a 7% expected EPS growth rate. Twenty four hedge funds invested in the stock in the third quarter. Glenn Russell Dubin’s Highbridge Capital Management had 3.50 million shares in TRW at the end of September.

Swift Transportation Company (SWFT) is a transportation services company. The company has a $1.11 billion market cap and the stock lost 36% in 2011. SWFT trades at an 11.84 forward PE and an 18% expected EPS growth rate. The stock was in 21 hedge funds’ portfolio at the end of the third quarter. David Gallo had more shares in SWFT than any other hedge funds. His Valinor Management reported to own 7.84 million shares in SWFT at the end of September.

Navistar International Corp (NAV): The commercial and military truck manufacturer has a market cap of $2.65 billion. The stock has lost 37% so far in 2011. It has a forward PE of 5.89, and its EPS is expected to grow at 19.4% in the next five years. Jeffrey Altman’s Owl Creek Asset Management had 6.10 million shares as of September 30th.

Overall, automaker stocks usually have high risk levels and pay little in dividends. The auto industry was hammered by the Europe crisis in 2011. When compared with the SPY’s decline of 2%, the 10 automaker stocks listed above all suffered large losses, and most of them were near their 2-year lows. However, as the automotive demand increases and the European crisis resolves over time, these stocks will probably outperform significantly.

Source: Top 10 Automakers Hedge Funds Are Buying