|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.
SYS-CON Events announced today that Hanu Software will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Leveraging best-in-class people, processes, and technologies, Hanu provides high-quality, high-value software development and business process outsourcing services to independent software vendors (ISVs) and enterprises.
May. 31, 2016 12:00 PM EDT Reads: 1,496
As cloud and storage projections continue to rise, the number of organizations moving to the cloud is escalating and it is clear cloud storage is here to stay. However, is it secure? Data is the lifeblood for government entities, countries, cloud service providers and enterprises alike and losing or exposing that data can have disastrous results. There are new concepts for data storage on the horizon that will deliver secure solutions for storing and moving sensitive data around the world. ...
May. 31, 2016 12:00 PM EDT Reads: 1,493
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
May. 31, 2016 12:00 PM EDT Reads: 2,608
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...
May. 31, 2016 11:45 AM EDT Reads: 2,108
As organizations shift towards IT-as-a-service models, the need for managing and protecting data residing across physical, virtual, and now cloud environments grows with it. Commvault can ensure protection, access and E-Discovery of your data – whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise. In his general session at 18th Cloud Expo, Randy De Meno, Chief Technologist - Windows Products and Microsoft Part...
May. 31, 2016 11:45 AM EDT Reads: 886
SYS-CON Events announced today that IBM Cloud Data Services has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. IBM Cloud Data Services offers a portfolio of integrated, best-of-breed cloud data services for developers focused on mobile computing and analytics use cases.
May. 31, 2016 11:30 AM EDT Reads: 1,631
The cloud era has reached the stage where it is no longer a question of whether a company should migrate, but when. Enterprises have embraced the outsourcing of where their various applications are stored and who manages them, saving significant investment along the way. Plus, the cloud has become a defining competitive edge. Companies that fail to successfully adapt risk failure. The media, of course, continues to extol the virtues of the cloud, including how easy it is to get there. Migrating...
May. 31, 2016 11:30 AM EDT Reads: 831
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in Embedded and IoT solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and ...
May. 31, 2016 11:15 AM EDT Reads: 904
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical...
May. 31, 2016 11:00 AM EDT Reads: 1,912
18th Cloud Expo, taking place June 7-9, 2016, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some...
May. 31, 2016 11:00 AM EDT Reads: 3,267
@DevOpsSummit taking place June 7-9, 2016 at Javits Center, New York City, and Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 18th International @CloudExpo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world.
May. 31, 2016 10:45 AM EDT Reads: 3,087
SYS-CON Events announced today that MobiDev will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex software systems for startups and enterprises. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobile software company with over 200 develope...
May. 31, 2016 10:15 AM EDT Reads: 2,909
How will your company move to the cloud while ensuring a solid security posture? Organizations from small to large are increasingly adopting cloud solutions to deliver essential business services at a much lower cost. According to cyber security experts, the frequency and severity of cyber-attacks are on the rise, causing alarm to businesses and customers across a variety of industries. To defend against exploits like these, a company must adopt a comprehensive security defense strategy that is ...
May. 31, 2016 09:45 AM EDT Reads: 913
We’ve been doing it for years, decades for some. How many websites have you created accounts on? Your bank, your credit card companies, social media sites, hotels and travel sites, online shopping sites, and that’s just the start. We do it often without even thinking about it, quickly entering our personal information, our data, in a plethora of systems. Sometimes we’re not even aware of the information we are providing. It could be very personal information (think of the security questions you ...
May. 31, 2016 09:30 AM EDT Reads: 1,084
SoftLayer operates a global cloud infrastructure platform built for Internet scale. With a global footprint of data centers and network points of presence, SoftLayer provides infrastructure as a service to leading-edge customers ranging from Web startups to global enterprises. SoftLayer's modular architecture, full-featured API, and sophisticated automation provide unparalleled performance and control. Its flexible unified platform seamlessly spans physical and virtual devices linked via a world...
May. 31, 2016 09:00 AM EDT Reads: 2,440