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1-Star Stocks Doomed to Drop: Daimler

By Brian D. Pacampara, CFA - Updated Apr 5, 2017 at 8:06PM

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Market-lagging returns could be written in this one star.

Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, German carmaker Daimler (NYSE:DAI) has received the dreaded one-star ranking. Our data has shown that one-star stocks woefully lag the market average; conversely, five-star stocks outperform the S&P by a significant margin.

With that in mind, let's take a closer look at Daimler's business, and see what CAPS investors are saying about the stock right now.

Daimler facts

Headquarters (founded)

Stuttgart, Germany (1883)

Market Cap

$28.91 billion

Industry

Auto manufacturers

TTM Revenue

$139.52 billion

Management

CEO Robert Nardelli (since 2007)

CFO Ronald Kolka (since 2007)

Compound Annual Revenue Growth (over last three years)

(12.1%)

Competitors

Toyota Motor (NYSE:TM),

Honda Motor (NYSE:HMC)

CAPS members bearish on DAI also bearish on

General Electric (NYSE:GE),

Vale (NYSE:RIO)

CAPS members bullish on DAI also bullish on

General Motors (NYSE:GM),

Ford Motor (NYSE:F)

Sources: Capital IQ (a division of Standard & Poor's), and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 64 of the 92 All-Star members who have rated Daimler -- some 70% -- believe the stock will underperform the S&P 500 going forward. These Fools include dew250 and uclayoda87, both of whom are ranked in the top 5% of our community.

Just last week, dew250 summed up the bear case using simple addition: “luxury plus motor vehicles... watch as interest rates and tightening belts kill their earnings and profits.”

In an earlier pitch from late October, uclayoda87 shared that bearish sentiment, writing:

Car sales are down in general due to the uncertain economy and tight credit. I also doubt that people want to buy a new expensive car that runs on only gas. Its like buying an old computer at an inflated price. When the auto industry comes out with a good quality gas/electric car or minivan that is a good value, then buyers will return.

What do you think about Daimler, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy always gets a perfect score.

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Stocks Mentioned

Ford Motor Company Stock Quote
Ford Motor Company
F
$15.83 (2.13%) $0.33
Honda Motor Co., Ltd. Stock Quote
Honda Motor Co., Ltd.
HMC
$27.00 (0.78%) $0.21
Toyota Motor Corporation Stock Quote
Toyota Motor Corporation
TM
$158.60 (0.45%) $0.71
General Electric Company Stock Quote
General Electric Company
GE
$78.90 (2.28%) $1.76
General Motors Company Stock Quote
General Motors Company
GM
$38.46 (1.34%) $0.51
Rio Tinto plc Stock Quote
Rio Tinto plc
RIO
$59.98 (1.59%) $0.94

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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