Beyond the EV Hype: 2 Unstoppable Stocks That Can Reward You for Years

Group 1: Electric Vehicle Market Overview - The market has adjusted growth expectations for electric vehicle (EV) sales, with ON Semiconductor and Autoliv identified as good value stocks for their growth prospects [1] - Historically, the automotive market has low single-digit growth rates, leading to low valuations that can be misleading [1] Group 2: ON Semiconductor Analysis - ON Semiconductor focuses on automotive and industrial end markets, particularly in EV and advanced driver assistance systems (ADAS) [2] - The company faced challenges this year, including reduced demand from an automotive original equipment manufacturer for silicon carbide chips [3] - CEO indicates an "L-shape" recovery in revenue, suggesting no significant bounce back is expected [4] - CFO believes underlying demand is better than current revenue growth suggests, citing inventory digestion as a factor [4] - ON Semiconductor trades at less than 19 times the Wall Street analyst consensus for full-year earnings, indicating it is undervalued for a growth company [5] Group 3: Autoliv Analysis - Autoliv holds a dominant position in the automotive passive safety market with significant global market shares in airbags (47%), seatbelts (45%), and steering wheels (40%) [6] - The company's growth is tied to light vehicle production (LVP) and its ability to increase content per vehicle (CPV), with higher-income markets showing a CPV of $330 compared to $200 in lower-income markets [6] - Management anticipates that LVP growth will primarily occur in medium- and low-income regions, potentially diluting the average global CPV [7] - Autoliv has historically outperformed its end markets, growing at 5% per annum since 1997 compared to market growth of 2.8% [8] - The stock trades at slightly less than 12 times estimated full-year earnings, with expected free cash flow of $1.82 billion over the next three years, representing over 22% of its current market cap [8]