On Jan 2, 2014, Zacks Investment Research upgraded Superior Industries International, Inc. (SUP) to a Zacks Rank #1 (Strong Buy).
Reasons for Upgrade
Superior Industries is the largest manufacturer of aluminum wheels for passenger cars and light-duty vehicles in North America. Aluminum wheels have replaced steel wheels due to their lighter weight. Presently, aluminum wheels are used in almost 65% of the total number of vehicles, and the percentage is increasing by 1% annually. For trucks, the ratio is 70%, while for cars it is in the high 50s.
Further, the Mexican operations of Superior Industries are witnessing an increasing operating income. The increase can be attributed to an improved mix of wheel sizes and finishes. Improving operating income in the region is favorable for the company, considering the decline in operating income from the U.S. operations.
Moreover, Superior Industries has no bank or other interest bearing debt on its balance sheet. The absence of any long-term debt has allowed for full utilization of cash by investing in potential opportunities as the company does not need to divert its funds for interest payments or debt repayment.
The Zacks Consensus Estimate for Superior Industries’ fourth-quarter 2013 earnings stands at 22 cents per share, up 125% year over year. The Zacks Consensus Estimate for the company’s 2013 earnings stands at 82 cents per share, down 12.77% over 2012.
Other Stocks to Consider
Some other stocks worth considering in the auto and truck industry include Gentex Corp. (GNTX), Oshkosh Corporation (OSK) and Tower International, Inc. (TOWR). All these carry a Zacks Rank #1 (Strong Buy).