Up in After market trading " Yesterday, I dubbed the selloff in auto stocks " car-pocalypse now," as shares of everything car related tumbled following disappointing auto sales. Shares of General Motors ( GM) and Ford Motor ( F)? Check. Auto-part makers like BorgWarner ( BWA)? Check. Used-car sellers like AutoNation ( AN) and CarMax ( KMX)? Check. Auto-part retailers like O'Reilly Automotive ( ORLY) and AutoZone ( AZO)? Oh yeah. So is it time to panic?
Nope, says JPMorgan analyst Ryan Brinkman and team, who use those exact words. "No need to panic," they write. "This is what a plateau looks like." What do they mean by that? I'm glad you asked because Brinkman has four reasons:
1. Sales are not down that much: "SAAR was softer than expected in March, but is tracking 17.2 mn YTD, not materially different than 17.3 mn in 1Q last year," Brinkman writes. "We estimate the macro drivers of strong new vehicle sales remain in place, including record average vehicle age, a solid employment backdrop, consumer confidence near 13-year highs, and historically low gas prices."
2. Car buyers still like trucks: "[Regarding] passenger car demand, the shift in mix away from passenger cars in favor of trucks and SUVs is not a concern above and beyond the
softer SAAR -- it is the silver lining," Brinkman explains. "Richer mix is what has allowed average transaction prices (ATPs) to remain strong in the face of higher incentives."
3. Incentives haven't been increasing: " [Incentive] spending actually declined -1% m/m vs. February, despite a +2% historically expected seasonal increase," Brinkman says.
4. The increase in inventory was General Motors' fault: "[Industry-wide] inventories tracked 72 days on hand vs. 65 a year ago, although most of this increase relates to GM, which had widely communicated a materially different than normal cadence of inventories throughout 2017, given the timing of new vehicle launches," Brinkman says. " see article 3 22 17 about GM
I am quite perplexed by how hard this is selling off here despite consistent earnings and operation's growth over the long haul . Down already 13% from the high . With the computers they just pushem down shorting with more gunpowder then the little guys that buy into it . Where it reverses nobody knows except late in the year and will peak early Q2 next year . One thing about BWA is its in OEM and aftermarket . Maybe forget Indy and give the money to shareholders .
$75 plus dividends within the next 5 years. 20% a year return for BWA buy here and go to sleep without worrying.
X axis : Stocks Price Correlation Coefficient Y axis : Quantity of stocks May-2016 1,000 Day Parameter 4,338 NYSE Stocks Price Analysis This stock mode of correlation coefficient is 0.5 In other words, the correlation coefficient of the other stocks
Immovable force meets unstoppable object now that BWA has seen EPS estimate for next quarter settled at the neutral level of 0.83. Possible pullback with some downside but also possible upside. check out awesomestock-s, its a pretty reliable service. of course you have to do your own due diligence, but they generally point you in the right direction.
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Judging by the RSI alone, which is at 53.52 on the daily chart - overall There's no doubt that we will see upside in the short-term. Maybe a pullback next day or so may possibly occur I suppose but are yall also seeing a further leg higher? I think its time for me to act upon this - let me check this out with lion/Stackalerts - they have helped me in the past as well.
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Interesting article in Forbes. Vehicle Electrification Is Much Bigger Than EVs google that it should come up . BWA is always treated like a old tech widgit company . It is tossed aside now expecting a cyclical slowdown yet their products are cutting edge and as they took market share years back with turbos and energy saving products they continue to position themselves in new technical applications for the automotive industry which should fuel growth and increased market share . We should be close to a bottom and there should be room to continue to raise the dividend while leaving plenty of $$ for further research and paying down debt . My figures point to at least $3.50 in earnings for 16-17 .
Nobody Here ? Is this company unkown. I am surprised nobody is ever on this board this is such a good company though it stalled with the concept of peak autos and uber taking over the market . Even uber drivers have to buy cars in fact by law they can't put one on the road older then 5 years vrs the 11 year avg age in the general public in most states . They must take cars off the road that are 10 years old too . At least here in Michigan for commercial transport by passenger car . I am surprised traders haven't jumped in here also as it has a large spread and has been in a fairly tight range for months . However I still believe their is long term capital appreciation to be had here and we could see a double in 5 years . The move into electric vehicle parts was a great move to capture future growth .
Earnings in the morning with CC on the open . Whisper number. is not known by me but everything I read is positive . The new Geely electric vehicle parts are exciting . The VW settlement may include new vehicle sales which will help . Interested to hear comments on how their dealing with the loss of business . This is a great company I have held for a long time . I was hoping to see a rise in dividend payments they announced today they will remain the same at 13 cents .52 a year . I think the drop in PPS before earnings will set up a pop tomorrow and there is nothing to fear . Won't be long till we find out .
I have been long this company for 20 years .. I think one should let this settle in for 3 days since the downgrade to nuetral then start buying on days of pronounced weakness . The lower March auto sales in the USA is definitely due to the Easter Holiday in the last week of March closing dealerships for Good Friday through Sunday . April should show a pickup . Some dealoers were even closed Monday for a 4 day holiday here in Michigan . BWA just introduced transmissions for electric vehicles and are well into expansion in that area . Give them a year they will be back over $60 a share . People are still driving cars over 10 years old that if they buy new can get up to 40% better MPG on average for comparison cars . A 2001 1/2 ton PU gets 14 mpg on avg with a v-8 , a 2016 19 -20 mpg and diesels can get up to 30 mpg in the Colorado on the highway . People will upgrade many are leasing which do not count in sales figures in most cases . Dealers actually expand margins when leasing then selling the used vehicles to those whom cannot afford new but need a warranty for certified used . Patience . If your afraid JCI is starting to break out and has some other then auto sales plus is splitting off auto later this year ( batteries and interiors ) . BWA is a good company . I bought 500 shares years ago at $6 and have been told to sell many times while this is the largest correction I can remember it has already come in the time to sell was when it was over $55 it will climb either on a earnings beat or other news ..it always does . Growth will return I wonder who will build the transmissions for the new ELIO vehicles hoped to come to market in 2017 and expected to sell over 100k units the first year . Hopefully BWA .