One eye-popping trend seen during the COVID-19 pandemic was that private vehicle ownership made a huge comeback.

Both cost and environmental concerns had somewhat stifled car sales for years before the pandemic hit. All of a sudden, health concerns around riding in confined spaces with strangers prompted a shift back to private transport.

Combined with supply constraints, the demand was so hot that, at one stage, used cars were costing as much as new cars.

As the world shifted to the post-COVID era, vehicle sales were expected to normalise.

But a memo to clients from the analysts at Celeste Funds Management suggests the party for the motor industry could go into overtime.

Strong results season for both these car retailers

According to the Celeste note, the team is bullish on dealership businesses Eagers Automotive Ltd (ASX: APE) and Autosports Group Ltd (ASX: ASG).

That’s despite both stocks already having risen handsomely in the past month.

“Listed car dealers Eagers Automotive and Autosports Group rose 19.9% & 0.5% respectively off the back of strong earnings results in February.”

Eagers, especially, has had a fabulous time. The stock price has rocketed more than 34% over the past month.

“Eagers delivered profit before tax (PBT) of $405.2 million, in-line with expectations and set a FY23 revenue target of $9.5 to $10 billion, underpinned by FY22 acquisitions, BYD Auto sales, and organic growth initiatives.”

Autosports Group didn’t do too badly either. 

“Autosports delivered PBT of $52 million, 9.9% ahead of expectations. No quantified guidance was provided, but the company noted continued momentum in 2h23.”

The Celeste team is backing both stocks for further gains.

“We believe both companies will continue to benefit from an elevated orderbook that should provide high earnings visibility over the next 12 to 24 months,” read the memo.

“We remain positively disposed to both stocks.”

Last month, Morgans analyst Andrew Tang also expressed his bullishness for Eagers.

“The order book has over a two-year run off period (yet to commence) providing solid near-term visibility,” he said.

“Cycle aside, Eagers is executing on building a sustainably higher earnings base via further consolidation, ongoing efficiency, new OEM strategies and new sales channels.”

The post Start your engines: Fund backs 2 ASX shares to finish line appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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