The Financial Post reports in its Wednesday, March 11, edition that it is no secret that the strengthening United States consumer base presents opportunities for investors. The Post's Jonathan Ratner writes in the Buy & Sell column that Kash Pashootan, portfolio manager at First Avenue Advisory, a division of Raymond James, says one area that should benefit from a stronger U.S. consumer is the auto sector. Mr. Pashootan notes that names such as Ford Motor and General Motors ($37.51) look attractive on a fundamental basis and remain relatively cheap, so they look like good buys if growth continues. He says a lower-risk approach can be had by owning auto parts maker Magna International ($132.56). Mr. Pashootan says: "If one of the automakers doesn't do well, that demand is going to be absorbed somewhere else. ... We're hedged against that risk with Magna, which sells to Ford, GM and Chrysler among many more."
Lower gasoline prices may also boost auto sales as consumers have more cash in their pockets, but many underestimate how long it takes for discretionary money to translate into greater spending. He believes this stage is beginning, saying that the consumer is "alive and ready."
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