A Big Upgrade for Honda
By
Dave Mock
September 19, 2008
|
Every day, the sun rises on Wall Street, and a plethora of professional analysts wake to issue new opinions on stocks. Here at the Fool, we use our "This Just In" column to examine some of these picks -- and the track records of the firms behind them -- so individuals can make better investing decisions.
In addition to following professional banks, anyone can use Motley Fool CAPS to monitor the collective opinions of more than 115,000 members, many of whom demonstrate better investing insight than published analysts do.
Enough top-performing CAPS members have turned bullish on Honda Motor Corp. (NYSE: HMC) recently to upgrade it from its long-held four-star rank to a more formidable five stars. A total of 1,542 members have given their opinion on Honda, with many of them offering analysis and commentary explaining the recent optimism.
Just as high fuel costs are forcing major airlines -- such as United Airlines parent UAL (Nasdaq: UAUA) and American Airlines parent AMR (NYSE: AMR) -- to make drastic changes to stay afloat, so too are automakers like GM (NYSE: GM) and Ford (NYSE: F) struggling to adapt to a massive shift in consumer preference toward more fuel-efficient cars. While Ford has gas-guzzling F-150 trucks sitting on the lot, Honda is seeing its fuel-efficient Civics move at a fast clip.
Honda has also benefited from consumer satisfaction, which is rising for foreign automakers at the same time it is dropping for domestic brands. No wonder, then, that Honda has fared much better in sales than competitors GM and Ford. Even Toyota's (NYSE: TM) sales declines in August were steeper. Honda also plans to release the competitively priced Insight, a new hatchback pure-hybrid, in the spring to compete better with Toyota’s Prius.
Honda's more conservative strategies of staying away from big engines and heavy trucks have played out well for the company. And while Nissan (Nasdaq: NSANY) and GM are testing the waters with battery-powered plug-ins, Honda is instead pouring resources into its hydrogen-powered FCX Clarity, which gets more power and range than a battery. Seeing good near-term performance and long-term potential, more than 95% of CAPS members rating Honda now expect it to outperform the market.
To see what the very best CAPS analysts are saying now about Honda -- as well as other winning stocks they are picking -- head on over to CAPS and have a look.
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