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Ford Paces US Auto Sales in June

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With an estimated SAAR of 15.7 million units during June, the US auto market continues to surge back to relevancy. Let’s take a look at the major players and their respective results. Ford Best Ideas Newsletter holding Ford (click ticker for report: ) continues to execute at an exceptionally high level. Unit sales jumped 13% year-over-year to 235,643 units. With the housing recovery in full gear, pickup sales have really accelerated, as F-Series sales surged 24% year-over-year to 68,009 units. Heavy truck sales increased 31% year-over-year, but only accounted for 726 units. Car sales were also fantastic, with sales increasing 13% year-over-year. Sales of the Fiesta more than doubled, while Focus sales jumped 9% and Taurus sales surged 15%. Fusion … Read more

Growth in Asia Should Drive Ford to New Highs

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Best Ideas Newsletter portfolio holding Ford’s (click ticker for report: ) CEO Alan Mulally recently revealed that the firm believes its Asia-Pacific segment will account for 40% of sales in four or five years. We think this is terrific news for the automaker, but we think the market doesn’t truly appreciate the implications of Mulally’s statement. Source: Ford 2012 10-K, Valuentum As shown above, Asia-Pacific currently represents a small portion of the company’s revenue mix, accounting for just 8% of sales in 2012. Ford was notoriously late to enter China, but we like the firm’s cautious approach and the popularity of the Lincoln brand in the burgeoning country. Ford is now making up for this late start. Year-to-date, wholesale unit … Read more

Why Valuentum’s Email Transaction Alerts Are Worth Paying Attention To

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Valuentum subscribers have noticed that we’ve been quite busy as of late, adding protection to our portfolio in the form of a broader-market put option and taking some large profits in Astronics (ATRO) and eBay (EBAY). We’ve highlighted our best-in-class hit rate–meaning that a large percentage of the firms we added to the portfolio are outperforming the broad market benchmark. But there are a couple ways of looking at our performance–the first is relative outperformance versus the market since inception, which is at 28 percentage points. Investors duplicating our portfolio are enjoying this outperformance. Another way of looking at our track record, however, is to evaluate the performance of additions to the portfolio on the long side (purchases) since inception–i.e. … Read more

The US Auto Recovery Is Unshakeable

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As the housing market recovery in the US appears more sustainable, US auto sales continue to gain steam. Low-end luxury is performing exceptionally well, as is the pickup segment—a likely result of the housing recovery. Let’s take a look at results from the industry. Ford Best Ideas Newsletter holding Ford (click ticker for report: ) posted a spectacular May, exceeding consensus estimates with unit sales surging 14% year-over-year to 246,585. As we hit home in our recent piece about the US housing recovery, pickup sales are driving a large portion of Ford’s gains. In fact, F-Series unit sales grew 31% year-over-year to 71,604 units! Other cars posting large sales included the Escape, up 26% year-over-year, the Fusion, up 10% year-over-year, and … Read more

Modest European Improvement Could Propel Ford Higher

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American automaker Ford (click ticker for report: ) reported fantastic first quarter results Wednesday morning. Revenue jumped 10% year-over-year to $35.8 billion, which was significantly better than consensus estimates. Earnings were modestly higher, growing 5% year-over-year to $0.41 per share, which was also much better than consensus expectations. The firm also generated $700 million in automotive operating cash flow, making it the twelfth consecutive quarter of positive cash flow performance—a drastic departure from where the company was five years ago. Image source: Q1 2013 Ford Investor Presentation The standout performer during the first quarter was once again North America. Automotive operating profit jumped 14% year-over-year to $2.4 billion driven by a 20% increase in revenue to $22.3 billion. Operating margins … Read more

Used Cars Sales Remain Spectacular at CarMax

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Used and wholesale car dealership CarMax (click ticker for report: ) reported wonderful results for its fiscal year 2013 fourth quarter. Revenue surged 14% year-over-year to $2.8 billion, easily exceeding consensus estimates. Earnings per share rose 12% year-over-year to $0.46, in-line with consensus expectations. With all of the hoopla surrounding new car purchases, CarMax continues to dominate the used car market. Comparable store unit sales increased 6% during the quarter, while total used unit sales jumped 12%. Average sales prices increased 4% year-over-year to $19,287, benefitting from increased market share in the 0-6 year old car market as well as constrained used vehicle supply. The stunning resiliency of used car prices indicates the robust level of demand for car upgrades … Read more

March Auto Roundup

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March was another strong month of auto sales in the United States. The SAAR for the month of March came in at 15.27 million units, up from 14.14 million units in March of 2012. Let’s take a look at the results by OEM. Ford Best Ideas Newsletter holding Ford (click ticker for report: ) posted unit sales growth of 6%, driven by utilities (up 14%) and trucks (up 6%). Car sales were flat during the month, though we saw a solid increase of 6% for the redesigned Fusion, and we saw Police Interceptor sales ramp significantly with sales coming in at just under 1,000 units. Consumers flocked away from crossovers, dumping the Edge (down 13%) and the Flex (down 35%), … Read more

February Auto Roundup

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Let’s take a look at February auto sales, which appear to have come in at a SAAR around 15.4 million units. Ford Best Ideas Newsletter holding Ford (click ticker for report: ) posted a solid February, selling 195,822 vehicles—a 9% increase compared to the same month a year ago. We think the number is even more impressive considering February 2012 had fairly good weather, while February 2013 was viciously cold and snowy for much of the United States. Strength was broad based, though utilities (up 21%) greatly outperformed both cars and trucks, which were up 6% and 4% year-over-year, respectively. Both the Edge (up 29%) and Explorer (up 59%) were hot sellers during February, possibly the result of a cold … Read more

GM’s Fourth Quarter Narrowly Misses the Mark

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Automaker General Motors (click ticker for report: ) announced solid fourth quarter results Thursday morning. Revenue rose 3% year-over-year to $39.3 billion, slightly exceeding consensus estimates. Earnings jumped 23% year-over-year to $0.48 (adjusted) per share, slightly below consensus expectations (Image Source: GM). Unlike competitor Ford (click ticker for report: ), GM continues to struggle with respect to profitability in North America. Sales grew 5% year-over-year to $24.2 billion, but operating margins declined 70 basis points to 5.8%, resulting in lower quarterly EBIT on a year-over-year basis. We’re not surprised, and we’ve speculated that the company might be putting too much inventory into dealer channels. GM reconciled the results (shown below), but it’s important to note that in the US, GM … Read more

Auto Parts Retailers Post Surprising Results

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Last week, Advance Auto Parts (click ticker for report: ) and O’Reilly Automotive (click ticker for report: ) posted better than anticipated fourth quarter results. Revenue at Advance Auto Parts was roughly flat year-over-year at $1.3 billion, in line with consensus estimates. However, the firm’s bottom line surprised materially to the upside, with earnings in the quarter decreasing just 2.2% on a year-over-year basis to $0.88 per share. O’Reilly’s fourth quarter was even more impressive, with revenue jumping 7% year-over-year to $1.5 billion, a touch better than the consensus forecasted. Earnings for the quarter also exceeded consensus estimates, surging 21% year-over-year to $1.14 per share. Though both companies posted better-than-expected results, the means were completely different. Advance Auto Parts, which … Read more