The Top 10 Automobile and Components Stocks of 2011

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What a crazy year it's been for investors. The S&P 500 jumped over 8% by May, only to turn around and find itself down over 10% in August, mainly as a result of the European debt crisis and Washington's inability to agree on a solution to our debt dilemma. Now, at the end of December, the S&P has fought back and is poised to end the year essentially flat.

But while the markets as a whole didn't change much over the past 52 weeks, there were companies that proved to be more resilient and were able to outperform their peers.

Here's a list of 2011's top 10 performers in the automobile and components industry:

Company

Percent Return in 2011

Goodyear Tire & Rubber (NYS: GT) 17.6
Harley-Davidson (NYS: HOG) 10.2
Drew Industries7.3
Tesla Motors (NAS: TSLA) 7.1
Icahn Enterprises2.7
Dorman Products2.1
Gentex (NAS: GNTX) (1.2)
BorgWarner (NYS: BWA) (12.0)
Lear (NYS: LEA) (19.6)
Johnson Controls (NYS: JCI) (19.8)

Source: S&P Capital IQ. Only includes companies listed on U.S. exchanges that contain a market capitalization greater than $500 million. Returns as of Dec. 28.

You know it's been a terrible year for the automobile and components industry when a company that has declined nearly 20% on the year makes the top-10 list. But according to S&P Capital IQ, there are only 25 companies in this industry that are listed on U.S. exchanges and have a market cap of over $500 million. And if you think this is bad, you should see my piece on the worst auto stocks of 2011. (That's where you'll find most of the major automakers.)

Let's start off at the top of this list with Goodyear, which actually lived up to its name over the past 12 months. The company swung to a profit in its first quarter, and saw its shares jump after beating estimates in its third quarter. All four of Goodyear's tire businesses set quarterly sales records in the third quarter, which helped offset higher raw material costs.

Tesla is perhaps the most interesting company on this list. The company expanded its deals with Toyota and Daimler this year, which should provide another way to grow the top line in the future. Pre-orders of Tesla's Model S four-door sedan look strong -- good news, as one can argue that the success of the company is in many ways tied to that car.

Tesla's stock likely would have finished the year much higher if not for Morgan Stanley analyst Adam Jonas' downgrade of Tesla shares in early December, which sent shares down sharply. Jonas now predicts that electric vehicles will only reach a market penetration of 4.5% by 2025, down from his previous expectation of 8.6%.

Johnson Controls, which is a global leader in automotive seating as well as door and instrument panels, has declined nearly 20% on the year. The company's automotive experience segment is strongly tied to Europe, where the segment gets over half of its revenues. The European debt crisis certainly didn't help the company in 2011, but it is well diversified in its other segments, so if you're bullish on the global economy in 2012, this may be an opportunity to purchase the stock for cheap.

Not all these companies had a great year, but they were able to outperform their peers over the past 52 weeks. If you're looking for strong outperformers in the year ahead, you're in luck. The Motley Fool has created a brand-new free report called "The Motley Fool's Top Stock for 2012." It highlights a company that we've dubbed "the Costco of Latin America" and picked out for explosive growth ahead. You can get instant access to the name of this company by clicking here -- it's free.

At the time this article was published Brendan Byrnes owns no shares of any company mentioned above. Motley Fool newsletter services have recommended buying shares of Drew Industries, BorgWarner, and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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