Major auto companies like Tesla Motors, Inc. TSLA, General Motors Co. GM, Ford Motor Co. F and Honda Motor Co., Ltd. HMC continued to make headlines over the last week. General Motors announced another leg of investments already ongoing in the U.S., while Tesla won new tax credits from the state of California. The board of Harley-Davidson, Inc. HOG authorized an increase in share repurchase program, while Ford entered the second phase of developing an autonomous vehicle technology. Meanwhile, Honda confirmed the eighth death associated with the defective Takata airbags.
(Read last to last week’s recap here: Auto Stock Roundup for Jun 18, 2015)
Recap of the Week’s Most Important Stories
1. General Motors announced that it will make an investment of $245 million in its Orion Assembly plant. The investment will be utilized to support the launch of an all-new vehicle program. With this, the automaker will also create 300 jobs. The automaker has invested about $962 million in the plant since it worked out its reopening with the UAW in 2010 (read more: General Motors to Invest $245M in Orion Assembly Plant).
2. Tesla has won a $15 million tax credit from the state of California. The terms require the company to create nearly 4,426 jobs in the area with a minimum salary of $35,000 per annum and an average salary of $55,000 by 2019. This will make Tesla the largest employer in California. However, the automaker has already hired a significant number of employees. It has over 9,000 employees in California at present. Tesla is among 63 companies that will receive tax breaks of $50 million on a cumulative basis (read more: Tesla Wins $15M California Tax Credits; Stock Up).
3. Harley-Davidson’s board has authorized the repurchase of an additional 15 million shares, which consist of 7.2% of the outstanding shares as of May 1, 2015. This is in addition to the buyback of up to 20 million shares authorized in Feb 2014. The new authorization makes nearly 30.9 million shares available for repurchase. Harley-Davidson will incur a long-term debt of $750 million in the third quarter of 2015 to buy back shares during the second half of the year. The company expects the rise in debt for share repurchases to be accretive to its earnings per share this year (read more: Harley-Davidson Increases Share Repurchase Authorization).
4. Ford has set up a global team to start work on an advanced engineering program for the development of autonomous vehicle technology. This is the second phase of bringing the feature to the market, following the completion of the research phase. The team will focus on developing the sensing and computing technology, necessary for adding the technology to vehicles. It will also work on the testing and refinement of algorithms, which is a key area for introduction of this technology (read more: Ford Assembles Global Team for Autonomous Car Revolution).
5. Honda confirmed the eighth death associated with the defective Takata airbags. U.S. regulators have also confirmed that the death of a woman in California in Sep 2014 was due to the defective airbags. The ammonium nitrate propellant in the airbag inflators produced by Takata sometimes burn quickly, and consequently shoot shrapnel at drivers and passengers.
Performance
Most auto stocks recorded gains over the last week. Ford was leading the list with a 3.2% gain, while General Motors recorded the maximum losses.
Meanwhile, the fortunes of companies remained the same for the last six-month period with Harley-Davidson leading the list of losses and Tesla holding the position of the biggest gainer once again.
|
Company |
Last 1-Week Period |
Last 6 Months |
|
GM |
-1.8% |
+4.2% |
|
F |
+3.2% |
+0.3% |
|
TSLA |
+1.8% |
+16.4% |
|
TM |
+0.4% |
+5.7% |
|
HMC |
-0.1% |
+7.5% |
|
HOG |
+2.1% |
-12.1% |
|
AAP |
+2.8% |
+2.1% |
|
AZO |
+0.9% |
+9.8% |
What’s Next in the Auto Space?
Later today, Winnebago Industries, Inc. WGO will announce its third-quarter fiscal 2015 financial results.
On Jul 1, major automakers will release their sales figures for June and first half of 2015.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment