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Auto Stock Roundup: THO's Tiffin Motorhomes Buyout, MGA-LG JV & More

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Last week, European Automobile Manufacturers Association released commercial vehicles registration data for the month of November. Commercial vehicle registrations in European Union inched up 0.1% from the prior-year quarter to 167,315 units amid strong demand for trucks, partly offset by a declining market for vans and buses. Commercial vehicles’ registrations in Italy and Germany witnessed year-over-year growth of 11.7% and 4.3%, respectively. Meanwhile, the same in France and Spain recorded a decline of 3.1% and 7%, respectively. For the 11 months ended November 2020, EU commercial vehicle registrations dropped 20.3% to 1.5 million units amid the pandemic-led sluggish demand.

Meanwhile, the recreational vehicle (RV) Industry Association also unveiled its shipment data for November. RV shipments jumped 43.4% year over year to 42,513 units last month, marking the highest-ever tally for the month. Towable RVs climbed 46.3% year over year to 38,485 units. This was mainly aided by a 49.5% surge in conventional travel trailers units. Motorhomes increased 20.3% year over year to 4,028 units for the period. The pandemic indeed proved to be a shot in the arm for RV companies with RV vacations emerging as the best social-distance travel option.

(Read the Last Auto Stock Roundup here).

Flashback to the Week’s Top News

Thor Industries, Inc. (THO - Free Report) announced the acquisition of Tiffin Motorhomes, Inc. and related companies, collectively referred to as Tiffin Group, in a deal worth $300 million. The purchase was funded bya combination of cash and borrowings from the company's existing asset-based credit facility.The acquisition of Tiffin is in sync with Thor’s long-term strategy of buying successful companies with robust management teams, top-quality operations, excellent product line-up and a solid dealer network, which in turn can take advantage of the latter’s financial stability and resources to fuel growth. In fact, the transaction offers ample scope for Thor to expand south outside the tight labor market in northern Indiana and will also boost its existing product portfolio.Winnebago currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Magna International (MGA - Free Report) inked a joint venture (JV) deal with South Korea-based LG Electronics to develop e-motors, inverters, on-board chargers and related e-drive systems. The JV, which is tentatively named LG Magna e-Powertrain, will help the firms expand their electric powertrain offerings by capitalizing on the existing engineering expertise and technological capabilities. Magna’s proficiency in electric powertrain systems and top-notch automotive manufacturing will complement LG Electronics’ strength in component development for e-motors as well as inverters. Contingent on necessary regulatory conditions and shareholders’ approval, the transaction is set to close in July 2021.

CarMax Inc. (KMX - Free Report) reported third-quarter fiscal 2021 (ended Nov 30, 2020) net earnings per share of $1.42, surpassing the Zacks Consensus Estimate of $1.11. Moreover, the bottom line compares favorably with the year-ago earnings of $1.04 per share, marking a year-over-year jump of 36.5%.The auto retailer registered revenues of $5,184.9 million during the fiscal third quarter, beating the Zacks Consensus Estimate of $4,977 million. Additionally, the top line recorded an 8.2% year-over-year increase. CarMax repurchased 1.2 million shares of common stock for $109.2 million under its share buyback program during the period. The company resumed its construction activity on new stores during the fiscal third quarter and anticipates to open roughly eight to 10 stores in fiscal 2022.

Daimler (DDAIF - Free Report) announced a long-term strategic collaboration with software giant Infosys for a technology-driven IT infrastructure. The company will gain access to Infosys Cobalt and other leading cloud providers to enable multi-cloud transformation with a smart hybrid cloud solution. Moreover, a carbon-neutral solution will support data consolidation and rationalization of data centers across all its plants and regions. Additionally, per the deal, Daimler will deploy its automotive IT infrastructure experts based out of Germany, wider Europe, the United States and the APAC region to Infosys in order to establish a scalable digital infrastructure. This transition also boosts Infosys’ automotive expertise.  

Price Performance

The following table shows the price movement of some major auto players over the past week and the past six-month period.

In the past six months, all stocks have increased with Tesla (TSLA - Free Report) being the maximum gainer. Over the past week, all stocks have gained apart from Ford, Toyota and Honda.

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