Tag Archives: GM

Tesla joined the $100B club, but VW is still bigger by enterprice value and will become the official global industry leader by sales for 2019

The shares of Tesla look more like Space X. The shares has skyrocketed since the summer last year, and the shares is up over 200 percent. It`s a funny story, but what`s even more funny is that Tesla joined the $100 billion club earlier this week. They surpassed Volkswagen.

The $100 billion club is measured by a market cap but if you look at sales or profit you have a different picture. But it isn`t bad to be the second most valuable global carmaker after topping the combined value of Ford and GM. Toyota is still on top with a value of $198 billion.

There is no doubt; the future is green and EV`s like Tesla will outnumber cars with fossile fuels. Musk is planning to build a new plant in Germany and started to sell from a new plant in China earler this month.

VW is still bigger by enterprice value and they will become the official global industry leader by sales for 2019. In a speech, Chief Executive Herbert Diess urged his executives to focus on profit rather than sales.

The EV industry have huge challenges. Battery technology is very expensive. So are R&D and all the factories they are planning build. On top of that you have all the workers. GM`s battle with the United Auto Workers union last fall illustrated how costly the process of winding down factories can be for companies too.

So far, the valuation have been bumpy and it seems like it will remain bumby. We saw a dip on Friday after a wild speculative ride.

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Smartphone apps with a new navigation system was a big disrupter for Garmin

Garmin Ltc is a classic innovative company that met competiton. They were early out with its awesome GPS navigation and wireless devices and applications. I can`t remember how many Garmin devices I have bought to use in my car, but it is many.

Garmin`s in-car GPS navigation was so useful about ten years ago. I used the system nearly every day, but unfortunately, everything comes to an end. So is it for Garmin. All of my old devices took the trip to the garbage, and the stock price followed the market trend.

 

 

Garmins old GPS devices is out, and now weve got portable navigation devices (PNDs), in-dash GPS systems, and GPS enabled smartphones. What you need about GPS is already installed in a Tesla for instance. So is it for many other cars.

You got voice-enabled navigation as the average PND price are getting lower and lower. So is it for the apps that is available on the smartphones. Google`s system Android and the smartphones on that system comes with free Google Maps with driving direction.

The smart phone apps was a big disruptor for Garmins business. A company that flooded the market by the mid-2000s with standalone GPS devices along with their competitors like Mio, TomTom, Magellen, Navigon and others.

The first ever GPS navigation system for a vehicle was GMs Guidestar system for the 1995 Oldsmobile Eighty Eight, and two of the most famous early models are Fords Microsoft-based Sync, and BMW`s iDrive.

Garmin ran some form of proprietary software on top of a readily available OS like Embedded Linux or Windows Embedded CE. Now, some of their models are sold for under $100. The cell phone apps killed the business.

The market have changed, and the most important changes over time relate to map data and the POI (point-of-interest) database. The most attractive and well-integrated are the new In-car navigation systems.

Manufacturers like QNX which supplies the underlying GPS systems for many of today`s auto companies are working to improve the system. So are open-source software like Linux and HTML5 code. They are all coming into play.

Microsoft has developed their own tech demo: A Windows 8-powered Ford mustang with integrated Microsoft Kinect, an Xbox 360, 4G LTE, smart phone connectivity, and several built-in projectors and cameras for use inside and outside the vehicle.

Garmin operates through five segments. It offers a range of auto navigation products, as well as a range of products and applications designed for the mobile GPS market. It offers products to consumers around the world, including Outdoor handhelds, Wearable devices, Golf devices, and dog tracking and training/pet obedience devices.

Garmin`s market cap is 12,23B, and the company is expected to report earnings on Wednesday 21, before market open. The report will be for the fiscal Quarter ending December 2017, and earnings forecast for the quarter is $0,75.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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What`s up in the auto industry?

If people have jobs and wages with great income, they will spend money on things. One sector to look for is the auto industry. I wrote an article about the auto industry in December last year, and GM said the auto industry was up 75% since 2009.

In 2009, the auto sales was only 10,4 million vehicles, but skyrocketed to as much as 18,2 million in December 2015, which was the highest level since 2001. But what now?

BMWpatent

(Picture: Mercedes-Benz patent)

 

We know there is a fear in the market and so is it in the auto industry. The GM stocks are down and look very cheap at the moment. GM is trading at around $28, which is near multi-year lows and that is after GM has smashed Q4 earnings.

Low interest rate and cheap gasoline have without doubt been extremely good for GM. They sold a lot of trucks and SUV`s which turned the automaker to beat the analysts estimates. Both on revenue and earnings and posted a record net profit of $9,7 billion for 2015.

Not only that. GM promised to do it even better in the next quarter. How in the world can GM say that, and what makes GM`s reward for outperforming in a market where most of the other blue chips cut costs and fire workers to hold the stock up?

German automaker Daimler AG is down about 4% (11 am) so far on thursday followed by a lackluster earnings report and a weaker outlook for 2016. They said 2015 was a strong year, but investors are jumping off the wagon as they warned that the earnings and sales growth in 2016 are likely to fall.

Dieter Zetsche said that Daimler expects growth in China to be slower in 2016. China is Daimler`s biggest market and their sale rose 41% in 2015. Despite expected slower growth in China, Zetsche belive they can achieve market share gains.

The auto industry is not as bad as the oil industry. Low gasoline prices is good for the auto industry and bad for the oil industry. BP announced earnings and its profits crashed 91%! At the same time, Daimler increased their dividends from €2,45 to €3,25 which is the highest ever.

Zetsche also said that big things will happen for Daimler in 2016.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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The Auto Industry is strong

The U.S auto industry is up 75% since 2009, and is on the way to a new record year of annual sales, according to GM. U.S auto sales was only 10,4 million vehicles in 2009 but has skyrocketed to as much as 18,2 million so far in 2015, and this is the highest level since 2001.

Did someone say the U.S economy is bad? October was a huge month for the auto industry, despite concerns about a slowdown in consumer spending and stagnant wages. According to World Bank, the GDP per capita in the U.S was last recorded at 46405,26 dollars in 2014. That`s an all time high.

sbcar

Fiat Chrysler automotive reported its 67th straight month of YoY gains. Up 14,7% from 2014. Ford Motor Co is up 13%. Toyota Motor Corp; up 13%. Nissan Motor Co; up 12,5% in October, while GM said its sales is up 16% to 262,993 vehicles last month. The best October since 2004.

We cannot say the same about Tesla. They lowered the number of vehicles it plans to sell in 2015. From 50,000 – 55,000 to about 50,000 – 52,000. Tesla`s earnings growth in 2015 is -159,03% vs industry earnings growth at 24,50%, while P/E is down -85,86%.

Despite that, the most hyped stock in the market is up over 11% on Wednesday. Tesla announced Q3 results on Wednesday and they missed while burning a record amount of cash. Q3 non-GAAP gross margin dropped from 29,4% in 2014 to 25,1%.

Tesla released the new SUV a month ago and they have spent a lot of money into the production of this new model, so investors will want to see that sales of their new Model X are offsetting those costs. Tesla`s ongoing cash burn is the company`s worst cash burning quarter in their history.

Tesla`s Model 3 will be their most cost-effective model starting at $35k, and Tesla said they will start taking orders in March next year. The stock is up on Wednesday because of Musk`s forecast and that was as usual bullish.

Tesla has been working hard on building its gigafactory outside of Reno in Nevada. Their goal is to produce cheaper batteries and China is in focus for Tesla, because weaker sales can move the manufacturing facility to the region, as China is a key market for luxury cars.

What about Volkswagen?

Volkswagen`s recall is one of the biggest in Europe with 11 million vehicles worldwide. That`s more then they sell in one year. Rebates may help them to slow the decline, but the German carmaker`s market share in Europe is at its lowest in six months. Do I need to say more?

All this is happening while the rests of the world is waiting for the driverless cars which may become sooner than expected. GM now tries to beat Google to the driverless future. Steve Jobs talked about building Apple Car as early as 2008, so we expect to see Apple as well in the market and sooner than we know.

I`m not in doubt; the electric car is the future of the auto industry.

There is one problem. If we`re gonna help the rich, we need to help the poor. People need money and jobs. That`s how you create consumers.What we see in Tesla`s stock today is the stock market in miniature. Bad news is turned into good and the stock is rising high in the sky.

The auto industry looks strong, but Q3 reports seems to give us a sign of slower sales and earnings, and I haven`t seen that since 2009. But stimulus in China and Europe helps the stocks to rally.

Fed Chair Janet Yellen said the economy is solid on Wednesday in testimony before the House Financial Services committee in Washington. She said that would spur December rate hike. She said; «Domestic spending has been growing at a solid pace».

The rate has been near zero since 2008 and the Fed have waited for labor markets to move closer to their goal of full employment. The unemployment rate stood at 5,1% in September. The auto industry need consumers.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. UA-63539824-1.

 

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