A sputtering economy, implosions at financial institutions, or just plain bad management -- on any given day, investors can name a number of reasons to sell a stock. Yet while panic is never beneficial to investors, it's good practice to play devil's advocate with investments from time to time.
In Motley Fool CAPS, more than 130,000 members have weighed in on more than 5,300 stocks, sharing bullish and bearish opinions alike.
A total of 3,272 members have weighed in on automaker Toyota's (NYSE: TM ) chances of success. I've already plucked out some of the bullish rationale backing Toyota today, so here are three counterpoints to consider, courtesy of CAPS:
1. Operating losses
U.S. auto companies such as GM (NYSE: GM ) and Ford (NYSE: F ) aren't the only automakers struggling in the bleak economy. Also, Toyota and Nissan are both expected to post losses in their upcoming earnings reports. While Honda is about the only one turning a profit these days, it's getting big help from its motorcycle sales.
2. Falling auto sales
Investors are also growing more concerned about the continued slide in auto sales across the board. The U.S. market tanked for Toyota, Honda, and Nissan. Although the U.K. has held up recently for Toyota, the carmaker will join Tata Motors (NYSE: TTM ) in cutting production and wages at its British plants.
3. Credit crunch
The Obama administration is knocking on doors at banks like Citibank (NYSE: C ) and JPMorgan Chase (NYSE: JPM ) for possible assistance in salvaging GM, should it fall into bankruptcy. Meanwhile, Toyota is seeking money from the Japan Bank for International Cooperation to help finance auto purchases. Commercial lenders have been cautious to lend to the auto industry, and Toyota's recent credit rating downgrades from Moody's (NYSE: MCO ) and Standard & Poor's have made raising money from the capital markets more costly.
Of course, in the past, Toyota has survived and thrived despite dozens of obstacles. But given the uncertainty over the company's future, a little extra help from CAPS can be a great way to augment your own analysis.
To see what the very best CAPS members are saying now about Toyota, just click on over to Motley Fool CAPS and have a look -- it's all free, and even open to your opinion.
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