So far in 2017, Fiat Chrysler (FCAU) shares have risen 14% this year against the S&P 500's advance of 1.2%. Shares of Ford (NYSE: F) have faltered, down 4.6%. Shares of GM (GM) are off 2.1%
The trend is unusual, at least based on the U.S. sales performance of the three companies. GM's January sales were 195,817 cars and light trucks, off 3.9% from January 2016. Ford's were down 7% to 171,186. Fiat Chrysler's collapsed 11.2% to 152,218.
Fiat's US numbers were particularly bad when its division performance is taken into account. Dodge (off 17% to 40,109), Jeep (off 7% to 58,415) , Chrysler (off 39% to 13,377), and Fiat (off 9% to 2,164) sales dropped. Only the Ram truck division showed an increase, but up only 5% to 38,045
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An explanation from the Motley Fool on February 2:
Shares of Fiat Chrysler Automobiles surged in January. FCA's NYSE-traded common stock ended the month at $10.99, up 20.5% from its closing price on the last day of December.
FCA shareholders had a bumpy ride in January. Share prices spiked early in January, after the company showed an electric minivan concept vehicle. Prices then fell sharply after the U.S. Environmental Protection Agency charged the company with civil violations related to a diesel engine used in Ram pickups and the Jeep Grand Cherokee -- but began to recover once it became clear that the diesel issue was a minor one.
The month's big news, however, was FCA's earnings report. FCA reported its fourth-quarter and full-year 2016 earnings on Jan. 26, and they were very good. The Italian-American automaker generated a net profit of 1.8 billion euros ($1.9 billion) in 2016, up from just 93 million euros ($100 million) the year before.
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That report cheered investors. FCA's guidance may have been even more cheering: The company forecasts increases in revenue, pre-tax earnings, and net profit in 2017, along with a significant reduction in its heavy long-term debt load. And it reiterated earlier guidance saying that it expects its total debt to fall below its cash holdings sometime in 2018.
The most likely reason for GM's stock problem is its bloated inventory, which few people believe will disappear soon. In November, these inventories reached record highs, and the company resorted to discounts to clear lots.
Ford's performance is puzzling. It is likely to be the U.S. car company least affected by potential trade friction with Mexico. According to MarketWatch:
Shares of Ford Motor Co. surged Friday, after Barclays turned bullish on the auto maker on the view that the potential benefit of President Trump’s border tax plan hasn’t been fully priced in yet.