The Zacks Analyst Blog Highlights:UBS, Ford Motor, Toyota Motors, Honda Motor and Nissan Motor

CHICAGO, Aug. 2, 2013 /PRNewswire/ -- 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 UBS AG (NYSE:UBS-Free Report), Ford Motor Co. (NYSE: F-Free Report), Toyota Motors (NYSE:TM-Free Report), Honda Motor Co. (NYSE:HMC-Free Report) and Nissan Motor Co. (OTC:NSANY-Free Report).

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Here are highlights from Thursday's Analyst Blog:

UBS to Buy Back Bailout Fund

UBS AG (NYSE:UBS-Free Report) – Switzerland's largest bank in term of assets – is set to end an embarrassing episode in its history. UBS plans to repurchase the remainder of the Swiss National Bank's bailout fund. During the 2008 financial crisis, the fund set up by the central bank helped the company to shed its toxic assets.

UBS declared its intention to acquire the fund in the fourth quarter, as a connected loan would be paid back to the central bank. The aforementioned move will likely strengthen UBS's capital base and make it competent to counter an economic downturn in the future.

The Background Story

After the bankruptcy of Lehman Brothers Holdings Inc. in 2008, UBS was on the verge of collapse. The bank's venture into the U.S. housing market led it to incur losses of about $57 billion during the economic crisis.

As part of the bailout, the Swiss National Bank took over 9% stake in UBS and  offloaded risky assets of $38.7 billion into a fund, while the government provided CHF 6 billion ($6.4 billion) as bailout money. Switzerland's government sold its investment in UBS within a year, for a profit of CHF 1.2 billion.

In consistence with the bailout, UBS was granted an alternative to buy back the fund once the loan to the central bank was repaid. Hence, it required UBS to shell out $1.0 billion and an additional 50% of its gains in order to repurchase the fund. UBS will, at present, buy back the bailout fund from the central bank after paying off the residual CHF 1.2 billion of the CHF 24.0 billion loan.

This will result in adding CHF 1-2 billion to the bank's balance sheet, apart from an increment of up to 70–90 basis points to UBS's common equity ratio in the fourth quarter. The bank's common equity ratio under Basel III rules was 11.2% as of Jun 30, 2013.

Ford Recalls C-Max Plug-In Hybrids

Ford Motor Co. (NYSE: F-Free Report) announced that it would recall 33,021 units of C-Max hybrid multi-purpose vehicles (MPV) in the U.S. due to a roof component that do not meet safety requirements. The issue has been noticed by both the National Highway Traffic Safety Administration and the automaker.

The recalled C-Max hybrid cars were manufactured between Jan 19, 2012 and Jun 26, 2013 in Michigan. Their roof components do not provide enough protection against head injuries. Only vehicles without the optional panoramic glass roof will be recalled by the company.

Ford Motor is planning to install plastic energy-absorbing material under the roof on both sides of the vehicle to correct the problem. The automaker has not yet received any reports of accidents or injuries related to the problem.

Earlier this month, Ford Motor also announced recall of 972 units of diesel variant of EcoSport mini sports utility vehicles (SUVs) in India due to a glitch with their the glow plug module, which helps in starting engines.

Ford started shipping locally manufactured EcoSport in India in June this year with a starting price of 559,000 rupees ($9,400) in order to tap the growing market for mini-SUV in the country.

Automotive safety recalls were brought into focus by media after Toyota Motors' (NYSE:TM-Free Report) announcement of the largest-ever global recall of 3.8 million vehicles in September 2009, triggered by a high-speed crash that killed 4 members of a family. Later on, a string of recalls has led Toyota to face numerous personal injury and wrongful death lawsuits in federal courts.

A few months ago, the Transportation Department of U.S. slapped a fine of $17.35 million on Toyota Motor due to late response regarding a defect in its vehicles to safety regulators as well as late recall of those vehicles.

According to the department, it was the maximum allowable fine under the law for not initiating a recall in a timely manner. The fine added to $48.4 million imposed by the U.S. government on the company in 2010 due to late recall of millions of defective vehicles.

In April, Toyota along with other Japanese automakers, Honda Motor Co. (NYSE:HMC-Free Report), Nissan Motor Co. (OTC:NSANY-Free Report) and Mazda Motor Corp. recalled 3.4 million vehicles globally for an identical problem. All these automakers have recalled vehicles for fixing defective airbag system in their vehicles, supplied by Japanese auto parts maker Takata Corp.

Ford, a Zacks Rank #2 (Buy) stock, posted an impressive 50% rise in earnings per share to 45 cents in the second quarter of 2013 from 30 cents in the same quarter of 2012 (all excluding special items). With this, the company has beaten the Zacks Consensus Estimate of 37 cents.

Revenues in the quarter grew 14.4% to $38.1 billion, exceeding the Zacks Consensus Estimate of $35.4 billion. The improvement was attributable to increased wholesale volumes in automotive business and higher market share in all its regions.

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