The last time we mentioned Warren Buffett was back in early May 2013 when we covered what was then called “the world’s largest solar power development.” Berkshire Hathaway’s MidAmerican Solar and SunPower Corp. teamed up to create a 3,230-acre solar development north of Los Angeles. Buffett was back in the headlines this week with news of another subject entirely: his purchase of the Van Tuyl Group, the nation’s largest privately-held car dealership chain.
Buffet joked on CNBC that he was now into “planes, trains and automobiles” (NetJets, BNSF Railway and car dealerships). The Van Tuyl Group boasts about $9 billion in annual sales, 78 independently operated locations in 10 states. And Buffett said he’d probably be buying more.
So, with Buffett jumping into the auto industry, does that mean it’s on the upswing? U.S. auto sales did climb 9.4 percent in September. But all Buffett would say is he’s a big believer in the strength of the U.S. economy and cars are certainly a consumer staple. People tend to make their car payments before their mortgage payments.
Overall, the automotive sector took a hit in recent days thanks in large part to Ford reducing its revenue guidance by $1 billion in late September due to problems in Europe and South America. Rightly or wrongly, investors followed suit and sold off (perhaps over sold?) many related stocks.
We’ve mentioned six auto-related stocks in recent weeks. Let’s see how they are faring.
Racine, WI-based Modine Manufacturing Company (NYSE:MOD) is a globally-focused thermal management company that designs, manufactures and tests heat transfer products for a variety of applications and markets. According to their website, MOD’s heat transfer innovations have “set industry standards for efficiency, economy and durability,” and they have filed more than 2,200 patents since their inception in 1916. MOD closed April 7 at $14.24 and closed July 28th at $14.17. MOD closed Oct. 3 at $11.87, up 7 cents for the day, with a market cap of $568 million. Its 52 week trading range is $10.79 – $17.51.
Remy International (Nasdaq: REMY), based in Pendleton, IN, is a global vehicular parts designer, manufacturer, marketer and distributor of aftermarket and original equipment electrical components for automobiles, trucks and other vehicles. It sells its products under the well-known Delco Remy, Remy and World Wide Automotive brands. REMY closed Aug. 8 at $21.20 and Sept. 5 at $22.19. On Oct. 3 REMY closed at $20.89, down 7 cents for the day, with a market cap of $668 million. Its 52-week trading range is $18.05-$27.30.
Northville, MI-based Gentherm Inc * (Nasdaq: THRM) specializes in thermal technologies by designing and manufacturing heating, cooling and ventilating systems and devices for diverse global markets including the automotive industry. The website states that they are “recognized by [their] largest automotive industry customers as a dependable and outstanding supplier of heated seating, climate seating, electronics, and cables.” THRM closed April 7th at $32.91 and July 28th at $46.62. On Oct. 3, THRM closed at $43.56, up 35 cents for the day, with a market cap of $1.5 billion. Its 52 week trading range is $18.96 – $52.29.
Autobytel (Nasdaq: ABTL), based in Irvine, CA, is an automotive marketing services company that works with dealers, manufacturers and automobile buyers generating leads and advising on financing, among other services. Second quarter revenue was $25.9 million, up 46 percent over last year and management has guided for a revenue increase in the third quarter of 22%-26% over last year. ABTL closed Aug. 8 at $8.16 and closed Sept. 5 at $8.36. On Oct. 3, ABTL closed at $9.65, up 64 cents for the day, with a market cap of $87 million. Its 52-week trading range is $7.07–$18.82.
Fuel Systems Solutions, Inc (Nasdaq: FSYS) is a New York, NY-based company that designs and manufactures alternative fuel components and systems for transportation and industrial uses. Its products are designed to control the flow of gaseous alternative fuels such as propane and natural gas in internal combustion engines. In June FSYS announced that MTM, one of its subsidiaries, has begun a new unit called BRC Brake Division with the intent to launch a comprehensive range of high-tech automotive brake pads by the fourth quarter of this year. FSYS closed April 7th at $10.28 and July 28th at $10.89. It closed Oct. 3 at $9.04, up 6 cents for the day, with a market cap of $182 million. Its 52-week trading range is $8.57 – $19.90.
TrueCar Inc. (Nasdaq: TRUE), based in Santa Monica, CA, operates the popular TrueCar.com website that provides market data for buyers including information on pricing for specific makes and models based on what other buyers actually paid for a similar vehicle. During the second quarter, TRUE had revenues of $50.5 million, up 62 percent over last year’s second quarter, and its stock price has been on a roll as well. TRUE closed Aug. 8 at $13.52 and Sept. 5 at $24.15. TRUE closed Oct. 3 at $21.10, up $1.03 for the day, with a market cap of $1.6 billion. Its 52-week trading range is $9.05–$25.00.
* Denotes client of Allen & Caron Inc., publisher of this blog