Review on Ford and Tata: Auto Industry Cruising on Its Road to Recovery and Growth
LONDON, January 23, 2013 /PRNewswire/ --
The auto sector is firmly on its growth trajectory and is looking to leave its bailout days behind. In 2012, the sector grew by almost 8 percent. The StockCall research team has issues-free technical analysis on Ford Motors Co. (NYSE: F) and Tata Motors ltd. (NYSE: TTM). Sign up now to access those at
http://www.stockcall.com/todaysopinions
Major auto companies like Ford Motors and Toyota are now out of survival mode and are planning to go for capacity expansion. While the auto sector is in positive territory globally with stocks such as Tata Motors ltd. making good moves, U.S. manufacturers are feeling confident enough to boost their R&D efforts. During 2012, auto sales may have faltered occasionally, but the overall trend remained positive, keeping auto stock investors optimistic about the future. StockCall's free technical analysis on Tata Motors is accessible at
http://www.StockCall.com/TTM012313.pdf
Ford to Augment Workforce, Introduce New Models
Ford Motors Co. [Free Technical Analysis Report on F](1) is consolidating its position in the auto sector while its stock is performing equally well in the stock market. During 2012, it kept its market share firmly above the 15% point. However, investors should remain vigilant about the 100 basis point drop in the market share. The stock is trading at P/E ratio of 3.19, which makes it an inexpensive stock when compared to the P/E multiple of 10.72 sported by its peer General Motors. Ford's stock provided 10%+ capital appreciation, keeping its investors happy, while it also managed to retain the loyalty of its customers. According to a survey conducted by Experian Automotive, Ford led the pack by posting 44.1% loyalty quotient.
Ford also announced its plans to hire about 2,200 salaried employees during the year. The announcement shows the company's optimistic view of its future and it is only natural that the positive impact will be shown via its stock price. Ford also recently doubled its quarterly dividend. Instead of 5 cents per share per quarter, the Detroit-based company will now be paying 10 cents per share each quarter. At the prevailing market price, Ford now offers dividend yield of about 2.83%, making it a reasonably attractive income stock.
While Ford gave above 10% return in the past 12 months, it made major moves in the last three months period, when it grew more than 35%. The stock movement is well supported by encouraging sales volume reported by Ford, which just reported its best December sales since 2006. Its monthly sales grew 26% on year-over-year basis and the future looks good for the stock.
Tata Riding on Jaguar Wave
Tata Motors hit the global auto scene with its high-profile acquisition of the Jaguar brand. However, the company has yet to transform itself into a true global auto player. It is likely to perform well, as Jaguar Land Rover unit posted a 14% jump in its monthly sales for the month of November.
Jaguar Land Rover Director (Group Sales Operations) Phil Popham said, "Both Jaguar and Rover brands continue to deliver strong sales globally. The record breaking performance in our home market, the UK, is great news."
Tata Motors' other marquee are still mainly dependent on their demand in the domestic market in India. The stock grew over 35% last year and gave about 1.15 percent dividend, making it a fairly attractive investment candidate. However, investors should keep in mind that the stock is susceptible to various macroeconomic factors which are drastically different from the factors impacting other global auto stocks such as Ford, Toyota and General Motors.
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- Ford Motor Co. Technical Analysis [ http://www.StockCall.com/FordMotorCo012313.pdf ]
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