Why Shares in AutoNation Rose This Week
Shares of auto retailer AutoNation (NYSE: AN) rose 8.6% this week through the close of trading on Thursday. The move came in a week when the company cheered investors with its third-quarter earnings release.
As for the earnings, investors had cause for concern. After all, consumer discretionary spending is being crimped by inflation, a slow economy is creating job concerns, and rising interest rates are making it more expensive to service debt. So everything points to a weakening consumer sector, and that's not traditionally good news for auto retailers.
That said, the auto industry has a unique set of dynamics around it right now whereby the supply of new vehicles continues to be hurt by production difficulties from ongoing supply chain problems. That's caused vehicle prices to rise.
Source Fool.com
