Soaring November automobile sales were all over the news this week. Honda, Nissan, Hyundai and BMW had their best November ever, according to the Los Angeles Times (http://www.latimes.com/business/la-fi-autos-auto-sales-20121204,0,2696209.story). Volkswagen had its best November since 1973.
Overall, imports did better than domestic brands thanks largely to new products like the revamped Honda Accord and Nissan Pathfinder, according to the Times report. A total of 1.1 million vehicles were sold in the month, 15 percent more than a year ago. Fuel-efficient cars, hybrids and small SUVs were among the most popular vehicles and “for the first time since it started selling hybrids in the U.S. in 2000, Toyota had serious competition in the hybrid market,” the Times noted. In only its second month of sales, Ford sold 5,000 of its new C-Max hybrid in November and 6,500 hybrids overall in the month.
Just how much to read into the sales totals is difficult to say, according to experts, because Superstorm Sandy was credited for bolstering the numbers. An estimated 250,000 vehicles were destroyed in the storm and the purchase of replacement vehicles probably skewed the monthly numbers. And, as we reported in October, low interest rates are also stimulating the auto market.
Over the long term, any increases in automobile sales should benefit small cap automobile industry-related stocks, which have been hit in recent years by the global slump in sales. Here are a few randomly chosen small caps:
Troy, MI-based Meritor Inc (NYSE: MTOR, http://www.meritor.com/) develops drivetrain mobility and braking solutions for trucks, trailers and specialty vehicles and aftermarkets in the transportation and industrial sectors. Its products are marketed globally under its Meritor brand or under the brands Euclid, Mascot, Trucktechnic and Gabriel, among others. In January 2012 Meritor sold its France-based axle operation to Renault. MTOR has a 52-week trading range of $3.83-$8.74 and a market cap of $427 million. It closed Dec. 4 at $4.42, up 11 cents on the day.
Detroit-based American Axle & Manufacturing Holdings (NYSE: AXL, http://www.aam.com/) designs and manufactures driveline and drivetrain systems and related components and chassis modules for light trucks, SUVs, passenger cars and commercial vehicles. The company’s products include axles, drive shafts, power transfer units, transfer cases, chassis and steering components, transmission parts and driveheads, among other products. AXL’s 52-week trading range is $7.93-$13.08 and its market cap is $765 million. It closed Dec. 4 at $10.22, up 10 cents for the day.
New York, NY-based Fuel Systems Solutions (Nasdaq: FSYS, http://www.fuelsystemssolutions.com/) designs and manufacturers alternative fuel components and systems for the transportation and industrial markets. Its components and systems control the flow and pressure of gaseous alternative fuels such as propane and natural gas used in internal combustion engines. The company operates in two divisions: IMPCO Operations and BRC Operations. In April 2011, IMPCO U.S. purchased NaturalDrive. FSYS’ 52-week trading range is $13.38-$29.41 and market cap is $294 million. FSYS closed Dec. 4 at $14.67, down 51 cents for the day.
Northville, MI-based Gentherm * (Nasdaq: THRM, http://www.gentherm.com/) is a global developer and marketer of thermal management technologies for a broad range of heating and cooling and temperature control applications. It’s also developing more efficient thermoelectric devices. THRM’s Climate Control Seat system, based on its proprietary thermoelectric technology, is being offered in more than 50 vehicles made by the world’s leading automobile manufacturers including Ford, General Motors, Nissan, Toyota, Kia/Hyundai, Land Rover and Jaguar, among others. THRM’s 52-week trading range is $10.06-$17.74. As recently as early October it was trading for more than$13. It closed Dec. 4 at $11.48, down 42 cents on the day. Market cap is $341 million.
Southfield, MI-based Federal-Mogul Corporation (Nasdaq: FDML, http://www.federalmogul.com/) is a global supplier of powertrain and safety technologies. Its customers are OEMs of automotive, light, medium and heavy-duty commercial vehicles, agricultural, marine, rail, aerospace, off-road and industrial applications as well as the worldwide aftermarket. It operates at 169 manufacturing, distribution and technical facilites. Last July Borg-Warner sold its spark plug business to FDML. Its 52-week trading range is $6.90-$17.97 and market cap is $706 million. FDML closed Dec. 4 at $7.14, down 15 cents for the day.
* Denotes client of Allen & Caron, publisher of this blog