The global chip shortage has greatly affected the production of new automobiles. However, this has been a boon to used-cars, parts, and supplies as prices have jumped. It has also been great for RV stocks as the demand has not been as affected by these issues. That’s why investors should consider undervalued automotive stocks such as Winnebago Industries, Inc. (NYSE:), AutoNation, Inc. (NYSE:), Sonic Automotive, Inc. (NYSE:) that could see their shares rise in the months ahead.A significant theme that has rocked multiple industries over the past year is the massive global chip shortage. One industry that has been particularly hit is the automotive industry. This has led to fewer new cars being produced and has also been a boon to used car dealers and parts suppliers. While the chip shortage was initially expected to be over sooner rather than later, we now know that’s further from the case.

Automotive News reported last week that a new forecast from IHS Markit predicted that the auto industry will not recover until the first half of 2023. This means there could be another year of inventory shortages and higher prices. While investors may want to avoid large automotive manufacturers, used cars, parts, and services will still be high in demand.

If we want to generate higher returns, though, we should focus on very cheap stocks. When I say very cheap, I am looking for a forward P/E below 10. I took a look at auto stocks in our POWR Ratings system with an overall rating of Buy or higher and a Value Grade of A or B. I found three stocks that certainly fit the bill: Winnebago Industries, Inc. (WGO), AutoNation, Inc. (AN), Sonic Automotive, Inc. (SAH).

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