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Auto Stock Roundup: Ford Beefs Up Electric Cars, Harley & Thor in Focus
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It has been a mixed week for auto stocks. While most auto companies continued their bearish run, a few managed to make gains too.
Also, the significance of electric cars and the alacrity of the auto companies were felt during the week. Ford Motor Company (F - Free Report) has shown keen interest in growth, manufacturing and after-sales servicing of all-electric passenger models in China.
In fact, competition from foreign SUVs and electric cars has necessitated these auto companies to prepare for the future differently. However, that does not mean that these companies have taken their eyes off the present.
A few auto companies are already mulling over ride-hailing services. Auto parts companies are also teaming up with other companies to enhance vehicle safety for self-driving cars.
1. Lear Corporation (LEA - Free Report) announced the closing of the offering of $750 million aggregate principal amount of 3.80% senior unsecured notes. For the Southfield, MI-based company, this move is expected to boost the financial flexibility and position it well to take advantage of conducive market conditions.
Lear Corporation is a leading global supplier of automotive seating systems, electrical distribution systems and electronics. The company utilized the net proceeds generated from the refinancing transactions to redeem $500 million senior unsecured notes due 2023, lowering the borrowings under the term-loan facility by around $200 million, and pay related fees and expenses. The proceeds were also spent on general corporate purposes. This has given a boost to the financial flexibility of the company (read more: Lear Closes Offering of $750M Senior Unsecured Notes).
2. Delphi Automotive PLC , Gillingham, England-based manufacturer of vehicle components and supplier of technology for automotive and commercial vehicles, has teamed up with Israel-based Innoviz Technologies for enhancing vehicle safety of self-driving cars. Notably, before tying up with Innoviz Technologies, which develops advanced remote-sensing solutions for mass commercialization of autonomous vehicles, Delphi made a minor investment in that company.
Notably, automakers are now putting tremendous efforts to build self-driving cars. These companies are investing in sensors that aid cars navigate on roads with potholes and pale lane markings.
Innoviz’s LiDAR remote-sensing solutions enable self-driving cars to spot objects at far distances. This in turn allows cars to travel safely at high speed. In fact, several self-driving experts are now considering LiDAR a vital component, alongside other sensors such as radar and camera (read more: Delphi, Innoviz Tie up for Self-Driving Solutions).
Currently, Delhi has a Zacks Rank # 3.
3. Jayco, Inc., a subsidiary of Thor Industries, Inc. (THO - Free Report) has announced another expansion in its Middlebury campus. The much-awaited expansion will include two new production lines for the Jay Flight brand – North America’s #1 selling travel trailer. Ground breaking on a 237,000 square foot mega-facility will occur at the end of September.
The expansion is likely to enhance efficiencies as well as raise production capacity for several other Jayco brands. The new mega-facility will create 300 new jobs to the Middlebury campus.
Currently, Thor Industries has a Zacks Rank # 3.
4. Ford has signed a Memorandum of Understanding (MoU) with Anhui Zotye Automobile Co., Ltd., an all-electric vehicles manufacturer in China. The objective of the MoU is to inspect the formation of a joint venture, which will look after the growth, manufacturing and after-sales servicing of all-electric passenger models in China.
The goals of MoU is in line with Ford’s vision of sustainable auto growth and addressing issues related to climatic changes and air quality improvement.
Per Peter Fleet, group vice president and president of Ford Asia Pacific, electric automobiles will be a major part of China’s future, and the company is excited about offering all-electric models in China, the largest auto market.
The vehicle manufactured will be sold under a brand owned by the joint venture that would aim for a sizable share in China’s all-electric vehicle market.
Previous to this in Apr 2017, Ford announced vehicle electrification plans for China, including the launch of two new electric vehicles in the country. By 2025, the company aims to ensure 70% of vehicles sold in the country are electric (Read more: Ford to Produce All-Electric Cars in China Via Joint Venture).
Currently, Ford has a Zacks Rank # 3.
5. Harley-Davidson Inc. (HOG - Free Report) launched 13 new models as part of its product development initiative. Out of the 13 models, five are new touring bikes and eight are all-new Softail Big-Twin cruisers. This recent launch is part of the company’s initiative to launch 100 new motorcycles by 2027.
Per Paul James, manager of product portfolio of Harley-Davidson, the new launches are for current riders and to attract new ones.
The eight new Softail models include- Fat Boy, Heritage Classic, Low Rider. Softail Slim, Deluxe, Breakout, Fat Bob and Street Bob.
All the newly launched models include the company’s Milwaukee-Eight engine. Other added features include daymaker LED headlamps, a USB charging port, an improved electrical system for charging and fuel tanks (read more : Harley-Davidson Introduces 13 New Motorcycle Models).
Harley-Davidson currently carries a Zacks Rank #5 (Strong Sell).
Performance
Among these stocks, in the least week, Tesla recorded the maximum decline. Among the gainers, Advance Auto Parts, Inc. (AAP - Free Report) is the frontrunner in the past week.
In the last six months, Tesla in the only stock whose price has risen, while Advance Auto Parts registered the steepest decline.
Company
Last Week
Last 6 Months
GM
-0.7%
-4.8%
F
-0.8%
-15.4%
TSLA
-2.8%
43.3%
TM
0.4%
-1.2%
HMC
0.0%
-11.3%
HOG
-1.5%
-17.8%
AAP
2.2%
-40.4%
AZO
-2.1%
-30.7%
What’s Next in the Auto Space?
With the earnings season over, stay tuned for the usual news updates in the space.
One Simple Trading Idea
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today.
Image: Bigstock
Auto Stock Roundup: Ford Beefs Up Electric Cars, Harley & Thor in Focus
It has been a mixed week for auto stocks. While most auto companies continued their bearish run, a few managed to make gains too.
Also, the significance of electric cars and the alacrity of the auto companies were felt during the week. Ford Motor Company (F - Free Report) has shown keen interest in growth, manufacturing and after-sales servicing of all-electric passenger models in China.
In fact, competition from foreign SUVs and electric cars has necessitated these auto companies to prepare for the future differently. However, that does not mean that these companies have taken their eyes off the present.
A few auto companies are already mulling over ride-hailing services. Auto parts companies are also teaming up with other companies to enhance vehicle safety for self-driving cars.
(Read the previous roundup here: Auto Stock Roundup for Aug 17, 2017)
Recap of the Week’s Most Important Stories
1. Lear Corporation (LEA - Free Report) announced the closing of the offering of $750 million aggregate principal amount of 3.80% senior unsecured notes. For the Southfield, MI-based company, this move is expected to boost the financial flexibility and position it well to take advantage of conducive market conditions.
Lear Corporation is a leading global supplier of automotive seating systems, electrical distribution systems and electronics. The company utilized the net proceeds generated from the refinancing transactions to redeem $500 million senior unsecured notes due 2023, lowering the borrowings under the term-loan facility by around $200 million, and pay related fees and expenses. The proceeds were also spent on general corporate purposes. This has given a boost to the financial flexibility of the company (read more: Lear Closes Offering of $750M Senior Unsecured Notes).
Currently, Lear Corporation has a Zacks Rank # 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2. Delphi Automotive PLC , Gillingham, England-based manufacturer of vehicle components and supplier of technology for automotive and commercial vehicles, has teamed up with Israel-based Innoviz Technologies for enhancing vehicle safety of self-driving cars. Notably, before tying up with Innoviz Technologies, which develops advanced remote-sensing solutions for mass commercialization of autonomous vehicles, Delphi made a minor investment in that company.
Notably, automakers are now putting tremendous efforts to build self-driving cars. These companies are investing in sensors that aid cars navigate on roads with potholes and pale lane markings.
Innoviz’s LiDAR remote-sensing solutions enable self-driving cars to spot objects at far distances. This in turn allows cars to travel safely at high speed. In fact, several self-driving experts are now considering LiDAR a vital component, alongside other sensors such as radar and camera (read more: Delphi, Innoviz Tie up for Self-Driving Solutions).
Currently, Delhi has a Zacks Rank # 3.
3. Jayco, Inc., a subsidiary of Thor Industries, Inc. (THO - Free Report) has announced another expansion in its Middlebury campus. The much-awaited expansion will include two new production lines for the Jay Flight brand – North America’s #1 selling travel trailer. Ground breaking on a 237,000 square foot mega-facility will occur at the end of September.
The expansion is likely to enhance efficiencies as well as raise production capacity for several other Jayco brands. The new mega-facility will create 300 new jobs to the Middlebury campus.
Currently, Thor Industries has a Zacks Rank # 3.
4. Ford has signed a Memorandum of Understanding (MoU) with Anhui Zotye Automobile Co., Ltd., an all-electric vehicles manufacturer in China. The objective of the MoU is to inspect the formation of a joint venture, which will look after the growth, manufacturing and after-sales servicing of all-electric passenger models in China.
The goals of MoU is in line with Ford’s vision of sustainable auto growth and addressing issues related to climatic changes and air quality improvement.
Per Peter Fleet, group vice president and president of Ford Asia Pacific, electric automobiles will be a major part of China’s future, and the company is excited about offering all-electric models in China, the largest auto market.
The vehicle manufactured will be sold under a brand owned by the joint venture that would aim for a sizable share in China’s all-electric vehicle market.
Previous to this in Apr 2017, Ford announced vehicle electrification plans for China, including the launch of two new electric vehicles in the country. By 2025, the company aims to ensure 70% of vehicles sold in the country are electric (Read more: Ford to Produce All-Electric Cars in China Via Joint Venture).
Currently, Ford has a Zacks Rank # 3.
5. Harley-Davidson Inc. (HOG - Free Report) launched 13 new models as part of its product development initiative. Out of the 13 models, five are new touring bikes and eight are all-new Softail Big-Twin cruisers. This recent launch is part of the company’s initiative to launch 100 new motorcycles by 2027.
Per Paul James, manager of product portfolio of Harley-Davidson, the new launches are for current riders and to attract new ones.
The eight new Softail models include- Fat Boy, Heritage Classic, Low Rider. Softail Slim, Deluxe, Breakout, Fat Bob and Street Bob.
All the newly launched models include the company’s Milwaukee-Eight engine. Other added features include daymaker LED headlamps, a USB charging port, an improved electrical system for charging and fuel tanks (read more : Harley-Davidson Introduces 13 New Motorcycle Models).
Harley-Davidson currently carries a Zacks Rank #5 (Strong Sell).
Performance
Among these stocks, in the least week, Tesla recorded the maximum decline. Among the gainers, Advance Auto Parts, Inc. (AAP - Free Report) is the frontrunner in the past week.
In the last six months, Tesla in the only stock whose price has risen, while Advance Auto Parts registered the steepest decline.
What’s Next in the Auto Space?
With the earnings season over, stay tuned for the usual news updates in the space.
One Simple Trading Idea
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today.
Learn more >>