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Auto Stock Roundup: US Sales Rebound, Record China Sales for Ford & GM

The auto sector rejoiced last week as U.S. sales figures finally improved after falling for three months. Even China sales figures of Ford Motor Co. F and General Motors Company GM set new records.

Meanwhile, AutoZone, Inc. AZO reported a year-over-year increase in earnings and revenues. While earnings were in line with estimates, revenues missed.

Among other noteworthy developments, Penske Automotive Group, Inc. PAG announced an acquisition, while Honda Motor Co., Ltd. HMC announced that it will construct a new plant in China.

(Read the previous roundup here: Auto Stock Roundup for Dec 1, 2016)

Recap of the Week’s Most Important Stories

1. U.S. light-vehicle sales rebounded with a 3.6% year-over-year increase to 1.38 million units in Nov 2016, following three months of decline. This is a new November high, which surpassed the previous record of 1.33 million units in Nov 2001. However, sales on a seasonally adjusted annualized rate (“SAAR”) basis fell to 17.83 million units in the month from 18.07 million units in Nov 2015. Also, SAAR for November was lower than 17.98 million units in Oct 2016 (read more: Sweet November for US Auto Sales, 2016 Fate Hangs in Balance).

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2. AutoZone reported a 13% year-over-year surge in earnings per share to $9.36 for the first quarter (ended Nov 19, 2016) of fiscal 2017 from $8.29 recorded in the year-ago quarter. Earnings were in line with the Zacks Consensus Estimate.

Quarterly revenues improved 3.4% year over year to $2.47 billion in the reported quarter. However, the figure lagged the Zacks Consensus Estimate of $2.49 billion (read more: AutoZone Meets Q1 Earnings Estimates; Revenues Lag).

Currently, AutoZone has a Zacks Rank #3 (Hold).

3. Ford and General Motors posted record high China sales figures for November. Ford and its joint ventures’ China sales (including Lincoln) improved 17% year over year to a November record of 124,113 units. Sales increased 10.7% to 1.1 million units in the first 11 months of 2016.

General Motors and its joint ventures in China reported a 7% year-over-year increase in sales to a November high of 371,740 vehicles. This takes the retail sales for the first 11 months of 2016 to a record 3.44 million units.

While Ford carries a Zacks Rank #3, General Motors has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

4. Dongfeng Honda Automobile Co., Ltd., one of Honda’s joint ventures in China, announced that it will construct a new automobile manufacturing plant with annual production capacity of 120,000 units. The company will invest 3 billion RMB ($435.4 million) in the plant, which will begin operations from the first half of 2019. This will be Dongfeng’s third automobile production plant.

Honda currently carries a Zacks Rank #3.

5. Penske Automotive has signed a deal to acquire CarSense, a stand-alone specialty retailer of used vehicles in the U.S. The company expects this acquisition to generate annual revenues of around $350 million along with earnings accretion of around 7 cents to 9 cents per share annually. The acquisition is expected to close in the first quarter of 2017, subject to customary conditions (read more: Penske Automotive Inks Agreement to Buy CarSense).

Penske Automotive currently carries a Zacks Rank #3.

Performance

A rebound in U.S. sales and the overall strength of the equity market pulled up all auto stocks over the last week. Ford was leading with an impressive 9.2% gain. Meanwhile, Harley-Davidson, Inc. HOG gained the most over the last six months, while Tesla Motors, Inc. TSLA posted the maximum loss among the stocks listed below.

Company

Last 1-Week Period

Last 6 Months

GM

+5.1%

+22.8%

F

+9.2%

-2.3%

TSLA

+2.0%

-18.0%

TM

+2.5%

+15.0%

HMC

+0.9%

+9.8%

HOG

+1.3%

+33.0%

AAP

+4.2%

+15.2%

AZO

+3.4%

+6.5%

Auto-Tires-Trucks Sector Price Index

 

Auto-Tires-Trucks Sector Price Index

What’s Next in the Auto Space?

Following the U.S. and China dales reports, a few automakers will report their Europe sales for November in the coming week.

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You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 "Strong Sells" and other private research. See the stocks free >>


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PENSKE AUTO GRP (PAG): Free Stock Analysis Report
 
FORD MOTOR CO (F): Free Stock Analysis Report
 
TESLA MOTORS (TSLA): Free Stock Analysis Report
 
HONDA MOTOR (HMC): Free Stock Analysis Report
 
AUTOZONE INC (AZO): Free Stock Analysis Report
 
HARLEY-DAVIDSON (HOG): Free Stock Analysis Report
 
GENERAL MOTORS (GM): Free Stock Analysis Report
 
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