3 stocks in poll position to drive your portfolio higher

The trend can be your friend when selecting stocks with positive momentum.

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The Australian Bureau of Statistics (ABS) has just released key figures for June on Sales of New Motor Vehicles. The results are pleasing with Australia recording a 0.2% month-on-month increase in trend terms to 93,031 vehicles.

Importantly five of the eight states and territories experienced gains in June with only Queensland, Tasmania and the ACT declining.

The increase in sales is a good sign for a number of ASX-listed stocks which are directly exposed to new vehicle sales. Given that two of the following three stocks have significantly underperformed the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO), which has gained 10.5% over the past 12 months, the positive trend will no doubt be welcomed by shareholders.

Automotive Group Holdings Ltd (ASX: AHE) operates one of Australia’s largest automotive retailing businesses as well as one of the largest refrigerated food transport and logistics businesses. Automotive Group’s diversification across auto and logistics offer shareholders certain advantages, however there may also be drawbacks from diversification which could explain the flat share price return over the past year.

ARB Corporation Limited (ASX: ARP) is a manufacturer, wholesaler and retailer of motor vehicle accessories such as roof racks and bull bars to the after-market. With ARB’s share price having fallen just over 4% in the past year, shareholders in ARB will no doubt be pleased by the ABS data which shows the national trend estimate for sales of Sports Utility and Other vehicles jumped 0.9% in June, offsetting a 0.5% drop in passenger vehicles.

AP Eagers Limited (ASX: APE) achieved record profits for the full year ending December 2013. The market certainly appears comfortable with how the business is tracking with the share price soaring 27% over the last 12 months, thereby not only blitzing the returns of its peers but also of the Index. Unlike its direct competitor Automotive Group, AP Eagers focuses exclusively on retailing cars (including luxury cars), trucks and buses, and has not diversified into other areas such as logistics.

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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

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