Tag Archives: stocks

As Drivers Hit The Road, Auto Parts Retailers Rake In The Profits

The auto parts industry group has slipped in the rankings in recent weeks, but it’s not for lack of solid companies in the group. It ranked No. 84 as of Thursday’s IBD. That’s down from No. 22 just six weeks ago. The reason seems to be that many of the stocks in the group are basing after making significant advances. The group has eight companies. Six of them have Composite Ratings of 80 or higher. The top company is O’Reilly Automotive ( ORLY ) with a Composite Rating of 97. It operates 4,571 auto parts stores and is opening more all the time. At an investor conference last August, the company told analysts that total U.S. miles driven is the No. 1 driver in the auto-parts business. That’s been flat at around 3 trillion miles since the financial crisis of 2008, but is starting to grow again as employment has gained. Falling fuel prices are also encouraging more driver to hit the road. As consumer confidence has improved, the size of the U.S. auto fleet has grown and is projected to grow more over the next few years. Even more important, better-engineered cars are lasting longer, resulting in an aging fleet that more often needs a replacement part. “We do not expect the average light vehicle fleet to decrease in the future,” the company said. O’Reilly isn’t the biggest of the auto parts chains — it ranks third behind AutoZone ( AZO ) and Advance Auto Parts ( AAP ) in number of stores — but it is the fastest growing, with a five-year annualized EPS growth rate of 25%. AutoZone has a 17% five-year average EPS growth rate, and Advance has a 15% rate. Each of the chains focuses on both the DYI, or do-it-yourself, market and the DIFM, or do-it-for-me market. AutoZone says the DYI market is a $51 billion-a-year industry that’s grown over the past 10 years at a 2.7% compound annualized growth rate. The DIFM market is $64 billion industry growing at a 2.2% clip. Auto parts chains aren’t the only companies in the industry group. LKQ ( LKQ ) is a company that distributes aftermarket replacement parts to body shops and mechanics. While AutoZone and O’Reilly appear to be in the final stage of forming bases, LKQ broke out of a cup-with-handle base Thursday with a 31.40 buy point. Volume was about one-third above average. It’s seeking to consolidate a fragmented industry by buying local businesses, while growing organically. The company acknowledges that the rise of collision avoidance systems being built into cars will hurt body shop businesses, but argues the effect will take years to come about. Copart ( CPRT ) is another company in the group also growing by acquiring smaller, local players. It conducts salvaged vehicle auctions for insurance companies, charities, dealerships and banks.

5 Global ETFs Beating SPY In Q1

This has been a pretty rough quarter for the global stock market. China-led shocks, the return of recessionary threats in global superpowers like the Eurozone and Japan, nagging oil worries and a backtracking U.S. economy wreaked havoc on the global economy. The World Bank and the International Monetary Fund (IMF) also lowered their outlook on global growth. Along with economic slowdown, corporate earnings recession scared investors. Tensions intensified in the U.S. and European financial sectors in the early part of the year. Though market sentiments restored somewhat in March with a slight rebound in oil prices, a raft of positive U.S. economic data and policy easing in foreign shores, the aforementioned headwinds weighed on the bourses in the year-to-date time frame. SPDR S&P 500 ETF (NYSEARCA: SPY ) has gained about 0.6% so far this year (as of March 29, 2016), while Vanguard FTSE Europe ETF (NYSEARCA: VGK ) has shed about 2.9% during the same time frame. iShares MSCI All Country Asia ex-Japan (NASDAQ: AAXJ ) has added 1.3% and all-world ETF iShares MSCI ACWI (NASDAQ: ACWI ) has gone up by 0.3% (read: Will European ETFs Continue to Underperform SPY? ) However, a few global ETFs have stood out so far in Q1 (with two more days to go). These have beaten the S&P 500 index as well as other global indices by a huge margin. After all, in this period, the ECB broadened its QE policy, BoJ made pro-growth changes in its accommodative policies by introducing negative rates and various economies resorted to rate cuts, which in turn aided the following global ETFs. WisdomTree Commodity Country Equity ETF CCXE (NYSEARCA: CCXE ) The $7.6 million fund looks to track the performance of dividend-paying companies ranked by market capitalization from commodity countries. No stock accounts for more than 5.53% of the portfolio with StatoilHydro ASA, Ambev S.A., and Telecom Corporation of New Zealand Ltd. taking the top three positions. Financials (24.33%), Energy (20.66%), Telecom (12.05%) and Consumer Staples (11.60%) have double-digit weight in the fund. The fund charges 58 bps in fees and has advanced about 8.4% in the year-to-date frame (as of March 29, 2016). AdvisorShares Athena High Dividend ETF (NYSEARCA: DIVI ) This $7.2 million active ETF offers dividend yield of about 4.07%. The fund is heavy on North America (55%) followed by Latin America (23%) and Emerging Asia (16%). None of the stocks accounts for more than 4.25% of the portfolio. The fund is up 7.8% so far this year (read: 3 High Dividend ETFs Under $20 to Watch ). iShares MSCI All Country World Minimum Volatility ETF (NYSEARCA: ACWV ) What could be a more reasonable bet than a minimum volatility ETF in turbulent times? Quite expectedly, ACWV has added 6% so far this year (as of March 29, 2016). This $2.57 billion fund tracks the MSCI All Country World Minimum Volatility Index. Though the ETF provides exposure to low volatility stocks across the globe, U.S. accounts for more than half of the asset base. Apart from this, Japan is the only country with a double-digit allocation. In total, the fund holds 353 stocks with each accounting for no more than 1.48% of the assets. Financials, healthcare, consumer staples, and consumer discretionary are the top four sectors with double-digit allocation each. It charges 20 bps in annual fees (read: Can Low Volatility ETFs Save Your Portfolio from Market Rout? ). SPDR S&P Global Dividend ETF (NYSEARCA: WDIV ) This fund follows the S&P Global Dividend Aristocrats Index, which measures the performance of the companies that have raised dividends for at least 10 years consecutively. The $59.2 million product charges an annual fee of 40 bps. WDIV also provides a nice balance across each component with none holding more than 2.45% share. Financials and utilities take the top two spots at 25.2% and 15.3%, respectively. The fund has gained 5.6% so far this year and yields about 4.34% annually. FlexShares STOXX Global Broad Infrastructure ETF (NYSEARCA: NFRA ) This ETF could be appropriate for investors seeking to play the booming infrastructural activities worldwide. Investors should note that infrastructure is an interest rate sensitive sector, usually with strong yields. Thus, a still-low interest rate environment in the U.S. and rock-bottom interest rates in the Eurozone and Japan made this infrastructure ETF a winner. The fund has exposure to each of these regions with the U.S. holding about 40.3% exposure, followed by Japan with 11.9% share, and 9.7% and 8.3% share taken by Canada and the U.K. respectively. NFRA yields 2.45% annually and has gained 5.42% so far this year (as of March 29, 2016). Original Post

HP’s Thrust Into 3D Printers Could Torch 3D Systems, Stratasys

The entry of HP Inc. ( HPQ ) into the 3D printer market is seen as creating problems for 3D Systems ( DDD ) and Stratasys ( SSYS ), causing an analyst to issue a warning about the two market leaders. While 3D Systems and Stratasys are the two largest providers of 3D printers, HP (formerly Hewlett-Packard before its split) will gain market share over time, wrote UBS analyst Steven Milunovich in a research note. He reiterated a sell rating on Stratasys with a price target of 19. UBS also has a sell rating on 3D Systems and a price target of 9. Stratasys stock was up almost 3%, near 26, during afternoon trading in the stock market today . 3D Systems was near 15, down a fraction. The stocks of 3D Systems and Stratasys, having collapsed over the past two years due to numerous problems, are up sharply since recently hitting bottom. Despite the improvement and expectations of a turnaround, Milunovich believes that HP will be a disruptor. He says that HP expects to formally announce its first product in a few months, with availability by year end. “We expect HP to discuss betas with large industrial companies and provide impressive performance metrics,” Milunovich wrote. He also said, “(HP) indicates little interest in acquiring either Stratasys or 3D Systems, which surprises us.” He believes that HP could gain broader technology, patents, channels and, with 3D Systems, metals capability, via an acquisition of one or the other. HP has also said that it plans to avoid the consumer market, where 3D Systems and Stratasys have flailed. 3D printer revenue, including supplies, is expected to top $7 billion this year and approach $10 billion by 2017. Despite the struggles of 3D Systems and Stratasys, the 3D printing industry is stronger than it seems , say industry analysts who track the field. Among companies with big investments in 3D technology are Nike ( NKE ) and General Electric ( GE ). Nike has used 3D printers to develop several sport shoes, while General Electric uses them to produce advanced jet-engine fuel nozzles.