Tuesday, August 25, 2015

Sexy vs Not - Automotive Edition

I'm no fan of the auto industry in general, but you wouldn't blame the "Old Auto" world for being a bit punchy these days.  "New Auto" can do no wrong...

General Motors (GM) 
$43 billion market value
Reported sales for the last 4 reported quarters ~$150 billion
Reported earnings for the last 4 reported quarters ~$4 billion
Dividend Yield --->  4+ percent
Today's Stock Move --->  DOWN

Ford (F)
$52 billion market value
Reported sales for the last 4 reported quarters ~$140 billion
Reported earnings for the last 4 reported quarters ~$3.5 billion
Dividend Yield --->  4+ percent
Today's Stock Move --->  DOWN

Tesla (TSLA) 
$29 billion market value
Reported sales for the last 4 reported quarters ~$4 billion
Reported earnings for the last 4 reported quarters ~ NEGATIVE $400 million
Dividend Yield --->  ZERO
Today's Stock Move --->  UP

Losing faith in the market?  Look in the mirror...

10 comments:

  1. i own GM, this has not been fun

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    1. If misery loves company, you are in good company with Einhorn and others. If you believe the auto upgrade cycle continues and that the dividend is sound, perhaps you follow them and buy more.

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    2. i have, i own b warrants as well, ouch! been trying to gage chinas demand, US demand still seems sound.

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    3. It's the demand side that is keeping me out.

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    4. demand overall? china? specific to GM? issue with uber/car sharing etc.

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  2. Low interest rates have pulled a lot of future demand forward. Thank you, Ben and Janet! This is not GM specific. And nothing to do with Uber. These are cyclical businesses.

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  3. i hear ya, definitely a concern. i only see that phenomena on a short term or isolate incident. if this is the case that would apply to more than just autos (house, capital equipment etc etc.) anything that needs financing?

    also autos age are at historical highs (I understand they are being made better etc so they last longer etc) which doesn't quiet match with the future demand forward thesis overall. also the entire collapse of auto demand during 2008, 2009 etc also dose not match with the future demand forward thesis overall.

    honestly we don't know we will find out.

    honestly i am more worry about 1) long term issue (make sure gm is competitives) 2) less demand in terms of car sharing, change of habits etc. not sure much due to interest rates and pulling demand forward.

    jmho, what do i know

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    Replies
    1. I think the concerns about car sharing are WAY overblown. As for the bigger issue of "anything that needs financing", I completely agree with you.

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  4. 3) short term demand due to china / us, since i own the warrant which is time sensitive, even if it is until 2019

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  5. I'm no fan of the auto industry in general, but you wouldn't blame the "Old Auto" world for being a bit punchy these days. "New Auto" can do no wrong... Raymon Kleinman

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