|By PR Newswire||
|August 11, 2014 09:30 AM EDT||
CHICAGO, Aug. 11, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the General Motors (NYSE:GM-Free Report), Ford Motor Co. (NYSE:F-Free Report), Fiat S.p.A (OTC:FIATY-Free Report), Toyota Motor Corp. (NYSE:TM-Free Report) and Gentex Corp. (Nasdaq:GNTX-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Friday's Analyst Blog:
2 Auto Stocks Ready to Accelerate
The U.S. economy has sprung back to life after GDP growth rebounded in the second-quarter. According to the "advance estimate" by the Bureau of Economic Analysis, second quarter output of goods and services increased at an annual rate of 4%.
This rise was in sharp contrast to first quarters' decline of 2.1%. The first-quarter contraction was for the first time in three years. Harsh winter weather was cited for hampering business operations and slowing down construction.
Second-quarter GDP increased above the economy's growth potential, which analysts believes to be between 2% and 2.5%. The GDP growth was fueled by improved consumer spending. Real personal consumption expenditure (PCE), which accounts for almost two-thirds of the U.S. economy, accelerated 2.5% in spring.
PCE is made up of expenditure on durable and non-durable goods. Durable goods jumped 14% in the second-quarter, more than the 3.2% increase in first quarter. One of the major components of durable goods – auto and auto parts – significantly contributed to the growth story.
Let's see how the Auto industry is progressing:
Impressive Growth Trends
The auto industry added 0.42% of annualized growth to 4% second-quarter GDP. This is a far better performance when compared to contributions to second-quarter GDP growth in the last three years – positive 0.01% in both 2012 and 2013, and negative 0.52% in 2011.
U.S. auto sales have shown impressive growth over the past few months. Light-vehicle sales improved 4% year over year to 8.17 million units in the first half of 2014. Sales on a seasonally adjusted annualized rate (SAAR) basis increased to 16.8 million units in May 2014 from the year-ago level of 15.5 million units.
May SAAR is the highest since July 2006. Sales on a SAAR basis reached the 17 million mark in June 2014 for the first time since July 2006. In July 2014, sales on a SAAR basis increased to 16.5 million units from the year-ago level of 15.8 million units.
Sales figures of major automakers were promising in the second-quarter 2014. General Motors (NYSE:GM-Free Report) recorded vehicle sales of 284,694 in May (up 13% year over year), 267,461 in June (up 1%) and 256,160 in July (up 9%). 2014 marks the company's best July sales since 2007.
Ford Motor Co. (NYSE:F-Free Report) reported a 3% increase in total sales from the year-ago period to 254,084 vehicles in May 2014, while sales declined 6% year over year to 222,064 vehicles in June. The company again bounced back in July with 10% year-over-year increase in sales to 212,236 vehicles. This marks its best July sales in 8 years.
Sales figures of Chrysler Group controlled by Italy's Fiat S.p.A (OTC:FIATY-Free Report) and Japanese Automakers such as Toyota Motor Corp. (NYSE:TM-Free Report) also climbed in all three months of the second-quarter.
Factors Contributing to Auto Sales Growth
Automakers are providing significant incentives to attract customers in order to boost sales. This is also leading to demand growth for auto parts. Further, higher age of vehicles on U.S. roads is resulting in demand for parts replacement.
While Incentives help boost sales growth, these might hurt margins. Incentives in the form of discounts led to a 2.2% sequential decline in the average transaction price for light vehicles to $30,575 in June.
Macroeconomic indicators such as upbeat consumer confidence data coupled with healthy and broad based private sector hiring also fueled growth in auto sales.
The encouraging economic indicators led banks to offer car loans with low interest rates and longer periods for repayment. That in turn boosted auto sales too. Low auto lending rates have propelled the total sum of loans to $902 billion as of July 2014 from $699 billion as of July 2011.
Auto Parts Manufacturers Set to Gain
The average age of a vehicle on U.S. roads is about 11.4 years. Moreover, according to IHS Automotive, the number of vehicles reached a record level of about 253 million or an increase of more than 3.7 million from last year. The U.S. auto industry hasn't seen this level since 2004. Hence with more vehicles running on the roads along with many whose ages are a bit of a concern puts the auto parts industry in an advantageous position.
Given these encouraging factors along with pent-up demand in the first quarter, it can be concluded that auto industry is well positioned to show improvements in the upcoming quarters.
2 Auto Stocks to Buy Now
Toyota Motor operates with three business divisions – automobiles, finance and another segment focusing on housing, information and communications. The company recorded earnings of $3.64 per ADR in first-quarter fiscal 2015 (ending Jun 30, 2014). Earnings per ADR surpassed the Zacks Consensus Estimate of $3.07.
The Japanese automaker posted consolidated net income of $5.76 billion for first-quarter fiscal 2015, improving from $5.68 billion in the year-ago quarter. Expected earnings growth rate for this Zacks Rank #2 (Buy) stock is 6.4%. The forward price-to-earnings ratio (P/E) for the current financial year (F1) is 9.8, which looks attractive. In the last three months the stock gained almost 7%.
The company reported adjusted earnings per share of 48 cents in the second quarter of 2014, in line with the Zacks Consensus Estimate. Adjusted earnings increased 33% from 36 cents in the second quarter of 2013.
Net income came in at $76.7 million in the second quarter of 2014, up 47% from $52.1 million in the second quarter of 2013.
Gentex expects net sales to increase 15–20% year over year in the third quarter of 2014. Gross profit margin in the third quarter of 2014 is expected to be approximately 39.5–40%.
Expected earnings growth rate for this Zacks Rank #2 stock is 25.4%. It also gives a decent dividend that yields 2.24%. It has an attractive P/E (F1) of 14.67.
With strong fundamentals and growth prospects, these two stocks are expected to show improved price performance in the near future. While most Auto stocks are expected to benefit from the industry's progress supported by the economic recovery, the favorable Zacks Rank of these two stocks may ensure their outperformance.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
SOURCE Zacks Investment Research, Inc.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from ha...
Nov. 22, 2014 10:00 PM EST Reads: 957
We are all here because we are sold on the transformative promise of The Cloud. But what good is all of this ephemeral, on-demand infrastructure if your usage doesn't actually improve the agility and speed of your business? How must Operations adapt in order to avoid stifling your Cloud initiative? In his session at DevOps Summit, Damon Edwards, co-founder and managing partner of the DTO Solutions, will highlight the successful organizational, process, and tooling patterns of high-performing c...
Nov. 22, 2014 08:45 PM EST Reads: 884
Software-driven innovation is becoming a primary approach to how businesses create and deliver new value to customers. A survey of 400 business and IT executives by the IBM Institute for Business Value showed businesses that are more effective at software delivery are also more profitable than their peers nearly 70 percent of the time (1). DevOps provides a way for businesses to remain competitive, applying lean and agile principles to software development to speed the delivery of software that ...
Nov. 22, 2014 08:00 PM EST Reads: 1,408
Docker offers a new, lightweight approach to application portability. Applications are shipped using a common container format and managed with a high-level API. Their processes run within isolated namespaces that abstract the operating environment independently of the distribution, versions, network setup, and other details of this environment. This "containerization" has often been nicknamed "the new virtualization." But containers are more than lightweight virtual machines. Beyond their small...
Nov. 22, 2014 06:45 PM EST Reads: 1,093
The move in recent years to cloud computing services and architectures has added significant pace to the application development and deployment environment. When enterprise IT can spin up large computing instances in just minutes, developers can also design and deploy in small time frames that were unimaginable a few years ago. The consequent move toward lean, agile, and fast development leads to the need for the development and operations sides to work very closely together. Thus, DevOps become...
Nov. 22, 2014 05:45 PM EST Reads: 1,177
ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ -- IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and asse...
Nov. 22, 2014 05:30 PM EST Reads: 1,028
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com...
Nov. 22, 2014 07:00 AM EST Reads: 1,323
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Ar...
Nov. 21, 2014 09:15 PM EST Reads: 1,243
Leysin American School is an exclusive, private boarding school located in Leysin, Switzerland. Leysin selected an OpenStack-powered, private cloud as a service to manage multiple applications and provide development environments for students across the institution. Seeking to meet rigid data sovereignty and data integrity requirements while offering flexible, on-demand cloud resources to users, Leysin identified OpenStack as the clear choice to round out the school's cloud strategy. Additional...
Nov. 21, 2014 08:45 PM EST Reads: 1,209
Technology is enabling a new approach to collecting and using data. This approach, commonly referred to as the "Internet of Things" (IoT), enables businesses to use real-time data from all sorts of things including machines, devices and sensors to make better decisions, improve customer service, and lower the risk in the creation of new revenue opportunities. In his General Session at Internet of @ThingsExpo, Dave Wagstaff, Vice President and Chief Architect at BSQUARE Corporation, discuss the ...
Nov. 21, 2014 08:00 PM EST Reads: 1,324
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
Nov. 21, 2014 08:00 PM EST Reads: 1,260
SYS-CON Media announced today that Aruna Ravichandran, VP of Marketing, Application Performance Management and DevOps at CA Technologies, has joined DevOps Journal’s authors. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Aruna's inaugural article "Four Essential Cultural Hacks for DevOps Newbies" discusses how to demonstrate the...
Nov. 21, 2014 07:00 PM EST Reads: 1,255
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Nov. 21, 2014 07:00 PM EST Reads: 1,199