CHICAGO, June 12, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Facebook (Nasdaq:FB-Free Report), Apple (Nasdaq:AAPL-Free Report), Starbucks (Nasdaq:SBUX-Free Report), Toyota Motor (NYSE:TM-Free Report) and Ford Motor (NYSE:F-Free Report).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday's Analyst Blog:
Driving Boom Fades: Will It Hurt Automakers?
According to a recent study by CNW, the percentage of car-less American households increased to 9.3% in 2012 from 5.7% in 1991. The percentage could further move up to 10% in this year or later according to the study.
Another study by the U.S. Public Research Interest Group ("PIRG") revealed more shocking facts. PIRG found that motorists aged between 16 and 34 have traveled 23% fewer miles in 2009 compared with 2001. Further, the ratio of cars to motorists dipped 4% from 1.24 vehicles in 2006.
The trend clearly raises a question: Is the driving boom over? It is a complex demographic issue that can be explained by many socio-economic factors. It can also endanger the household vehicle business of automakers in the future, which became a low-margin but stable revenue generating business after the recession.
Two-Fold Problem
Unfortunately, the picture becomes gloomy when we consider the 16 to 24 year age bracket. Unemployment rate in the bracket is very high at 16.1% now. This could definitely take a toll on the automotive industry, since this age bracket can be related to America's once popular "on the road" car culture.
The upward shift in the retirement age has also aggravated the unemployment problem. The baby boomers, unlike earlier, are willing to work for a long time in order to make up for the loss in wealth during the latest recession. This shifted the retirement age to the highest level in more than two decades, reducing the labor turnover. As a result, youngsters find it hard to occupy seats in the job market.
Secondly, mounting student debt is slowly becoming an impending crisis in the U.S. Outstanding student loans in the U.S. stood at $986 billion in the first quarter of 2013, up $20 billion from the prior quarter. Over 10% of these student loans are more than 90 days delinquent.
While student loans help youngsters graduating for obtaining a high-paying job, the same becomes a burden when they are unable to find their preferred job. If paying hefty installments on these loans become troublesome, can they dare think of affording a new car or other appurtenances?
Changing Priorities
Facebook FB Free Report Apple AAPL Free Report Starbucks SBUX Free ReportApart from the opulences, youngsters are inclined to break many social conventions. They now prefer to delay buying homes and achieve parenthood much later than their earlier generations. At the same time, they seem to follow several austerity measures in order to face the uncertainties in the job market such as living with the parents, driving their cars occasionally and saving money.
Also, the younger generation no longer feels the ardent need to purchase cars due to the developing public transit system. Public transport is gaining importance due to increasing traffic gridlock across the major cities around the world. Hanging around the city with the help of ubiquitous public transit system and cabs is much more pleasant and frugal nowadays than being stuck in a gas-guzzler.
In fact, many governments across the world have taken measures to curb the use of personal vehicles. They are levying heavy taxes on new cars, which are making household cars costly. For example,
Toyota Motor
-
) popular Prius hybrid costs over six times higher in Singapore compared to the U.S. due to exorbitant tax rates in the country.
Does it Really Matter to Automakers?
What should be the automakers' take on the waning driving boom? Definitely, it calls for a change in their marketing strategy, which should be focused more on non-household vehicles or vehicles required by corporations, government agencies or car rental companies known as fleets.
The recent trend suggests that the automakers are already inclined towards fleet sales as the economy recovers and businesses improve. Ford Motor (NYSE:F-Free Report) sells nearly a third of its vehicles in the U.S. to fleet buyers while Chrysler sells roughly 80% of its minivans to fleet customers. However, focusing too much on fleet sales could be detrimental as they contributed to the Detroit Three's woes prior to the recession.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on AAPL - FREE
Get the full Report on FB - FREE
Get the full Report on SBUX - FREE
Get the full Report on TM - FREE
Get the full Report on F - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
SOURCE Zacks Investment Research, Inc.
Share this article