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This week, we discusses the auto stocks which all look really cheap. Most of them are trading with single digit forward P/Es. Is this a dream come true for value investors or is it a value trap?

Remember, a value trap is a company that appears to be cheap by its fundamentals but which really isn’t because earnings are on the decline.

We dug into the auto stocks to determine if they really are just cheap stocks or if value investors are walking into a trap.

5 Auto Stocks: Cheap or Value Traps?

1.    General Motors (GM - Free Report) has a forward P/E of just 5.4. 5.4! Is now the time to buy?

2.   Ford (F - Free Report) is almost as cheap as GM. It has a forward P/E of 6.5. What are investors missing?

3.   Magna International (MGA - Free Report) makes auto chassis, exterior, vision systems, and roofs. It trades with a forward P/E of 8. Are the auto parts companies in a different place than the auto makers?

4.   Borg Warner (BWA - Free Report) has a forward P/E of 10.5. It makes combustion systems, starters and alternators.

5.   Lear Corporation (LEA - Free Report) makes seating and electrical systems for the auto industry. It has a forward P/E of 8.7. Are rising earnings estimates a game changer?