Stockchase Opinions

Jim O'Shaughnessy Daimler DDAIF-OTC TOP PICK Feb 02, 2006

Loves the dividend yield. Very cheap. Price to sales ratio is .3 so you are paying $.30 for every $1 of sales.
$57.060

Stock price when the opinion was issued

Automotive
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DON'T BUY
Would rather own a bank. Not making any money on cars and expect this will be even more so as people move away from SUVs.
DON'T BUY
Should be a beneficiary of stronger economic growth. Has been trading in a range. Things are looking a little bit weak in the US.
PAST TOP PICK
(A Top Pick Feb 2/06. Up 11.6%.) Still likes.
DON'T BUY
Doesn't like. Too much like investing in airlines.
COMMENT
After 20 years of producing sub par products Chrysler is trying to resuscitate a brand at a time when the industry has way too much capacity. As a taxpayer, he doesn't want to take money that was created with winning companies and give it to losers. Has no problem if they go bankrupt.
COMMENT
Bondholders are going to the Supreme Court and it is vital they win. What happened in General Motors (GM-N) and what the US government is trying to do is to snuff out the rights of bondholders. They are favouring unions and awarding them a disproportionate amount of ownership. Could happen to other companies and makes the US a less attractive place to invest for foreign investors.
COMMENT
Generally doesn't buy carmakers, as they traditionally don't have a high return on capital. Good company, but he prefers auto parts.
COMMENT

Looking at any of the auto manufacturers, you have to look at how you want to make money in the market, and looking at these names on a price to earnings basis, they are attractive. With the economic recovery unfolding, there are opportunities to own them. You have to pick which name you want to be in. He prefers auto parts manufacturers as a better way to play the sector, rather than picking one car manufacturer over another.

DON'T BUY
All the autos look cheap on a price to earnings basis but it slows in a slowing economy people buy fewer cars. Buyer beware, we are moving to electric vehicles. It is too early in a down cycle to step into auto stocks right now.