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The Zacks Analyst Blog Highlights: Toyota Motors, Volkswagen, Suzuki Motor Company, Renault SA and Mazda Motor

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For Immediate Release

Chicago, IL – August 25, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Toyota Motors (NYSE:TM Free Report), Volkswagen AG (OTCMKTS:VLKAY Free Report), Suzuki Motor Company (OTCMKTS:SZKMY Free Report), Renault SA (OTCMKTS:(RNLSY - Free Report) – Free Report) and  Mazda Motor Corporation (OTCMKTS:MZDAY Free Report).  

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Here are highlights from Thursday’s Analyst Blog:

Foreign Autos Rev Up: 5 Stocks to Buy Right Now

After a record breaking year for car sales in 2016, it hasn’t exactly been the hottest stretch for auto stocks so far this year. What’s more, as investors look ahead to the next generation of cars—one that will be dominated by self-driving technology—it can be easy for today’s trends to get lost in anticipation.

Nevertheless, as we progress further into the second half of 2017, it looks like car stocks could finally be turning a corner. More specifically, foreign manufacturers appear to be driving full steam ahead with a renewed sense of momentum right now.

Indeed, according to the latest data from Germany’s VDA, several key international markets recorded strong growth in auto sales during the month of July. Europe and China notched vehicle registration growth of 1.8% and 5.5%, respectively, and India proved that it is an exciting growth market with year-over-year gains of 15.1%. In fact, the United States was the only major car market in the world with weaker year-over-year results.

And while there may be some sustained weakness in U.S. sales, things are actually shaping up reasonably well for foreign manufacturers here in the States. Based on the Wall Street Journal’s latest data, Toyota’s share of the U.S. market climbed from 14.1% to 15.7% over the past year, while Honda moved from 10% to 10.7% and Nissan added 0.4% to sit at 9.1%.

Furthermore, our “Automotive – Foreign” industry currently sits in the top 5% of the Zacks Industry Rank, and over the past month, this group of companies has gained an average of nearly 2%—outpacing the S&P 500’s 1% dip over that same timeframe.

This group sits so high in the Zacks Industry Rank because 10 out of the 18 stocks that we include in this category currently have a Zacks Rank #2 (Buy) or better ranking. But which foreign auto stocks are the best? Check out the seven Zacks Rank #1 (Strong Buy) foreign carmakers below!

1.       Toyota Motors (NYSE:TMFree Report)

Toyota is coming off a positive earnings surprise of 36% and is now expected to post earnings growth of a respectable 2% this fiscal year. On top of that, the company has an “A” grade for Value, as well as an overall VGM grade of “A.” With a beta rating of just 0.62, this stock is hypothetically less volatile than the market average, and Toyota is currently paying out a solid 3.2% dividend—meaning this could be a great pick for income-minded investors as well.

2.       Volkswagen AG (OTCMKTS:VLKAYFree Report)

Volkswagen missed the Zacks Consensus Estimate in the most recent quarter, put we’ve seen two positive revisions to its current-year and next-year earnings estimates, so the near future still looks bright. On top of that, its P/E ratio of 5.77 is better than the industry average, and its expected sales growth of nearly 14% is impressive. Volkswagen has also posted better-than-average cash flow growth of 15.4%, and its overall VGM grade of “A” further underscores its financial stability.

3.       Suzuki Motor Company (OTCMKTS:SZKMYFree Report)

Suzuki has been one of the hotter foreign auto stocks recently. Shares have gained more than 5% over the last month, thanks in large part to its strong earnings growth. This recent price movement has helped the stock earn an “A” grade for Momentum, and its growth figures have given it a “B” in the Growth category. Suzuki is also sporting a “B” in the Value category, and we’ve seen positive estimate revisions for its current-quarter, next-quarter, and next-year earnings recently.

4.       Renault SA (OTCMKTS:RNLSYFree Report)

Renault is another stock with solid fundamental metrics on top of its strong Zacks Rank. The stock has “A” grades for Value and VGM, and its most impressive figures are its better-than-industry average P/CF and P/E ratios. Additionally, Renault is expected to post EPS growth of 58% and sales growth of 24% this fiscal year, which significantly outpace the averages of its industry peers. The company also pays a respectable 3.1% dividend and may be attractive for income investors.

5.       Mazda Motor Corporation (OTCMKTS:MZDAYFree Report)

In addition to its strong Zacks Rank, Mazda is sporting “A” grades for Value and VGM, as well as a “B” grade for Momentum. The company has a better-than-industry-average RoE, and its P/E and P/B ratios also come in better than its peers. The company recently inked a deal with Toyota to build a new joint venture manufacturing plant in the U.S., which should help its efforts to snag more market share in North America.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Strong Stocks that Should Be in the News

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