Investopedia: Bull Vs. Bear - Major Automakers Face A Tough Future

Question: Are automakers a smart investment right now?

Bear's Response
The auto industry has certainly enjoyed a meaningful recovery from the worst of The Great Recession, when both General Motors and Chrysler declared bankruptcy and Ford (NYSE:F) came under serious stress. It wasn't just an American phenomenon either - even mighty automakers such as Toyota (NYSE:TM), Nissan (OTC:NSANY) and Honda (NYSE:HMC) saw major declines in sales and profitability, and a host of European carmakers saw substantial stress.

While auto sales for the major automakers may be better than its lowest levels, that doesn't mean that major automakers represent great investments today. Not only are these companies facing a challenging demand environment, but production costs are increasing and this industry has a decidedly mediocre history of financial performance.

Please click here for more:
http://stocks.investopedia.com/stock-analysis/2012/Bull-Vs.-Bear-Major-Automakers-Face-A-Tough-Future--F-TM-NSANY-HMC0709.aspx

Investopedia: Could BorgWarner's High-Quality Miss Be An Opportunity?

Not all misses are created equal, and a miss that is based largely on taxes and "other income" can be an opportunity for investors to pick up shares a little cheaper than otherwise. BorgWarner (NYSE:BWA) continues to offer a compelling story in the auto parts sector - not only as more manufacturers outsource parts, but as fuel efficiency and emissions become even more important.

Read the full article here:
http://stocks.investopedia.com/stock-analysis/2012/Could-BorgWarners-High-Quality-Miss-Be-An-Opportunity-BWA-HON-F-NSANY0501.aspx

Investopedia: Johnson Controls Seeing Multiple Recoveries

Passenger vehicles and non-residential building are two sectors that have seen some pretty ugly conditions in recent memory, and that certainly showed up in a 25% revenue decline for Johnson Controls (NYSE:JCI) in 2009. Economic conditions have turned around, though, and the company has seen a strong rebound in its results. Now with signs of life in the building efficiency segment, could even better results be on the way for shareholders? 

A Mixed Fiscal Second Quarter 

Like so many other companies this quarter, Johnson Controls gave investors a mix of good news and some disappointment in its fiscal second quarter results. Revenue jumped 22% and was comfortably above even the high end of the range, as all units posted solid progress. The auto business led with over 25% growth, but even the building efficiency segment saw better than 18% improvement from last year. (For more, see Johnson Controls Sitting Well.)

Margins were more problematic, though. Gross margin ticked down 20 basis points, due largely to commodity inflation and product mix. Segment income did improve by over 30% and all segments did show year-on-year improvements in their operating margins. Unfortunately, analysts had expected even better improvement, particularly in the building segment. So while patient shareholders may not be too bothered or disappointed with 30% segment income growth, the short-term trading tenor may be negative. 

To continue, click below:
http://stocks.investopedia.com/stock-analysis/2011/Johnson-Controls-Seeing-Multiple-Recoveries-JCI-NSANY-SI-HON-UTX-GNTX-XIDE0426.aspx

Investopedia: The Japanese Earthquake's Effects On Insurers

Although it is still far too early to fully assess the scale and impact of the severe earthquake that struck northeastern Japan, and all of us at Investopedia wish our friends and readers in Japan the best, the fact remains that markets have to digest this information and move forward. To that end, it seems quite likely that major reinsurance companies are going to face large claims in the wake of this disaster. 

The Scale of the Disaster 

As of this writing, which is only hours after the quake struck, it is all but impossible to get a firm sense of the damage in the Tohoku region of Japan. While the reported magnitude of this quake is considerably higher than that of Great Hanshin quake that struck Kobe in 1995, it does not automatically follow that this quake will surpass the fatality (over 6,000 dead) or economic damage (roughly $100 billion) of that prior disaster. Let us all hope it does not.

Nevertheless, there are many major manufacturing facilities in this region owned by companies like Sony (NYSE:SNE), Toyota (NYSE:TM),and Nissan (Nasdaq:NSANY) to name a few. What's more, given the reports of infrastructure damage that have already come in (roads, bridges, and the like), it seems probable that there has been significant economic damage.

Please read the full piece at Investopedia:
http://stocks.investopedia.com/stock-analysis/2011/The-Japanese-Earthquakes-Effects-On-Insurers-BRK.A-RNR-SWCEY-ACGL-ACE-XL-RE0311.aspx