Auto Parts Could Rev Up Returns

Reports of the death of the auto industry have been greatly exaggerated.

American automakers are certainly still in trouble, but there is a wide world out there and people, especially Chinese people, continue to buy cars. If people are still buying cars, that means companies are still building cars. If companies are still building cars, that means there is still business out there for auto parts companies.

Back From the DeadInvestors are right to be skeptical of the thesis that there is actually money to be made from investing in auto parts stocks. After all, many of these companies had the same problems as the U.S. automakers - stagnant sales, competition from foreign companies, outdated (and excessive) cost structures and too much debt. More than a few companies went bankrupt or flirted with bankruptcy.  (For more, see Analyzing Auto Stocks.)

For the full article, please continue on to: 
http://stocks.investopedia.com/stock-analysis/2010/Auto-Parts-Could-Rev-Up-Returns-ALV-GNTX-SORL-TXIC-ARM-AXL-TEN0525.aspx