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America's cheapest cars

Posted Jul 17th 2008 2:12PM by Eliza Popescu (RSS feed)
Filed under: Forecasts, Consumer Experience, Competitive Strategy, General Motors (GM), Toyota Motor Corp. (TM), Economic Data

We have heard a lot of news over the past 12 months about soaring fuel prices and the effect it is having on the major automakers. With record-high oil prices, and gasoline running about $4.10 a gallon, drivers are spending more and more money to fill up their tanks. One of the natural options for people has been to move towards less expensive, small, and simple cars.

General Motors Corp. (NYSE: GM) noticed that fuel-efficient vehicles will be more appealing to consumers, and announced last week plans to reduce production at its truck division (a bit late to join the party, but at least it's something for the struggling auto maker). Toyota Motor Corp. (NYSE: TM) is also slashing truck production during three months at its U.S. plants.

While It is true that most less expensive cars don't offer the same luxury when compared to sedans or SUVs, they come with a lot of options that can satisfy every individual need. Among the cheapest cars available, the article points out Honda's Fit ranked No. 11 at $13,950, a small car whose standard version comes with an adjustable steering column and four-speaker audio system, and is equipped with multiple airbags in the front, rear and side. Other vehicles that follow the same logic are the Chevrolet Aveo, ranked No. 2 at $11,460; the Toyota Yaris, third at $11,550, and the Kia Spectra, fifth at $12,895.

Continue reading America's cheapest cars

Comcast (CMCSA) looking pretty cheap

Posted Sep 24th 2007 12:57PM by Eric Buscemi (RSS feed)
Filed under: Comcast Cl'A' (CMCSA), Verizon Communications (VZ), Bargain Stocks

Eric Savitz of Barron's gave a well-needed reminder of how cheap Comcast Corporation (NASDAQ: CMCSA) is over the weekend. The leading cable company, whose stock is down 16% for the year, now sells for a valuation almost equal to that of its slower growing Baby Bell competitors.

It is also interesting, in this period of bankers attempting to market debt and equity for private equity transactions that cannot even cover their interest expense, that Comcast covers its interest expense some five-fold, with it jumping to 6.8x next year.

Comcast's stock has gotten hit on concerns of Verizon Communications (NYSE: VZ) beginning to get some traction on its video deployment, which has slowed down growth of the cable giant. However, Comcast is getting five customers for each one the Baby Bell competitors are getting from the cable company.

Merrill Lynch has a twelve month price target of $38 per share, up from $23 today. Not a bad return for a high quality company that is a cash flow machine.

UAL Corp earnings: Strong results, still looks too cheap

Posted Jul 25th 2007 11:51AM by Eric Buscemi (RSS feed)
Filed under: Earnings Reports, UAL Corp (UAUA), Bargain Stocks

UAL Corporation (NASDAQ: UAUA), the holding company for United Airlines, reported some of the best results in the company's history, as it earned its highest net income in seven years.

UAL generated operating cash flow of $1 billion for the quarter, versus a market cap $5.5 billion; year-to-date the company has generated $1.5 billion in free cash flow
Revenue of $5.2 billion is the highest level in company history
The highest profits in seven years comes despite higher energy prices
Operating profit margins doubled and most impressive was the free cash flow yield of 20%, pretty amazing considering this industry has a history of never earning its return on invested capital. It appears this might be changing, at least for the short term.

The large net operating loss allows the company to keep most of the money it makes and not pay it to the government. We started blogging about this stock when it was selling for $25 as it emerged from bankruptcy. I'd stay with UAL, as there looks to be a lot more money to be made with this stock.