What is SRT and why does its revival matter for investors?

SRT stands for Street and Racing Technology, Stellantis' specialized performance division that creates high-powered versions of their vehicles. Its revival is significant because performance vehicles typically have higher profit margins and create demand for specialized components from suppliers. For investors, this signals a growth opportunity in the companies that make these advanced parts and the retailers who sell them, potentially leading to increased revenues and profits across this automotive ecosystem.

What are Tier 1 suppliers in the automotive industry?

Tier 1 suppliers are companies that provide parts and systems directly to automobile manufacturers (like Stellantis). They're the top level of the automotive supply chain and typically work closely with automakers during vehicle development. These suppliers create complex components and systems like engines, transmissions, electronics, and braking systems. Most of the stocks in this theme are Tier 1 suppliers who may win contracts to provide specialized components for new SRT vehicles.

What is the difference between OEM and aftermarket parts?

OEM (Original Equipment Manufacturer) parts are made by the same companies that supply components for new vehicles during manufacturing. These are identical to the parts installed at the factory. Aftermarket parts are made by different companies and installed after purchase, either as replacements or upgrades. This theme includes both OEM suppliers who will provide parts for new SRT vehicles and aftermarket companies that will benefit as owners maintain and modify their performance cars over time.

What is "Market Cap" and why does it matter for these stocks?

Market Cap (short for Market Capitalization) is the total value of a company's outstanding shares and represents the company's total market value. It's calculated by multiplying the current share price by the total number of shares. For automotive suppliers, market cap helps you understand company size and how significant new SRT-related business might be to their bottom line. Smaller companies might see a bigger percentage impact from SRT contracts, while larger companies offer more stability but potentially less dramatic growth.

What are "Projected Sales" and "Projected Profit"?

Projected Sales refers to analysts' forecasts of a company's future revenue (the total money they expect the business to bring in), while Projected Profit estimates how much money will remain after expenses. For automotive suppliers in this theme, strong projections might indicate that analysts already anticipate benefits from Stellantis' SRT revival or broader industry trends. These figures help investors gauge growth expectations and evaluate whether a stock is priced appropriately relative to its future earning potential.

14 handpicked stocks

SRT Revival: Performance Parts

Stellantis is bringing back its legendary SRT performance division, creating exciting opportunities throughout the automotive supply chain. This collection features carefully selected stocks of parts makers and retailers positioned to benefit from this high-performance resurgence.

Han Tan | Market Analyst

Updated 2 days ago | Published at जुलाई 3