Two Votes for Foreign Cars

03/28/2003 12:00 am EST

Focus:

Louis Navellier

Editor, Blue Chip Growth and Emerging Growth

“A good example of how a well-selected stock can be an oasis amidst the chaos of the market is Nissan Motor (NSANY NASDAQ),” says Louis Navellier, editor of the Blue Chip Growth Letter. ”While sales at both Ford and GM have slipped, companies with more fuel-efficient vehicles – including Nissan – have prospered. Nissan’s strength is the innovative new styling for most of its cars and trucks, which remain in high demand. The company’s momentum started with its new Altima sedan.  It recently launched its larger Maxima sedan based on a stretched Altima platform. The firm also has the hot-selling new Murano truck, which is also based on the same platform. By using the same platform for these three lines, the company can undercut its competition and boost its operating margins, which are currently wider than every other vehicle manufacturer except for Porsche. In addition, Nissan’s Infiniti brand is also capturing substantial market share.  Both the Nissan and Infiniti brands have developed a sporty image as they offer high horsepower vehicles with innovative styling.  Overall, Nissan will likely continue to capture a larger share of the US car and truck market, which will boost its underlying profitability for the next couple of years.”

 

”Every once in a blue moon, we recommend an auto stock,” says Stephen Leeb, editor of Personal Finance.  ”Hello, blue moon. Toyota Motor (TM NYSE) is the third largest automaker in the world and it’s by far the best-positioned automaker for long-term growth. Far less cyclical than any other major automaker, Toyota has an exceptional balance sheet and generates a great deal of free cash flow, which it has been using to repurchase its own shares.  In addition, the company is rated AAA by S&P. In the current uncertain world, this top rating represents uncommon downside protection paired with outsized potential long-term rewards. Because of its Asian base and heavy emphasis on fuel efficiency, the firm is the best-positioned major auto company to gain a foothold in the massive China market. The company’s edge in fuel efficiency will also enable it to thrive if, as we expect, gas prices continue to rise. Toyota, an exceptional play on worldwide industrialization, is a buy up to $52.”  

 

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