Honda Motor Co., Ltd. (ADR) (NYSE:HMC)

CAPS Rating: 5 out of 5

The Company develops, produces and manufactures a variety of motor products, ranging from small general-purpose engines to specialty sports cars.

Recs

1
Player Avatar TSIF (99.96) Submitted: 3/25/2011 4:03:17 PM : Underperform Start Price: $37.83 HMC Score: +0.73

I really hate to pick on a company that is down right now with so much bad news in Japan, but overall, a quick analysis of the auto market indicates that Honda Motor Company will clearly take the largest short term hit and most likely the longest long term hit as the information continues to develop. This is a global economy and pretty much everyone has borrowed the Japanese manufacturing philosophy's which includes LEAN and JIT, (Just in time delivery's). Inventory is a bad word. While the philosophy has been adopted worldwide, the Japanese company's treat it like a religion. While Honda Shares have already come down about 12% from their recent ALL TIME high a few weeks ago and while their P/E, P/B, and other metrics are the lowest I could find in their industry, the bottom line is that if you make something with 100 parts and are missing ONE, you can't make the end product. 99 parts ready, one part missing = no product. I'd be hard pressed to see how they can get power, facilties, transporation, and all parts up anytime in the near future and while eventually they may be pushing their ALL TIME stock high again, it won't be in the short run. Again, best wishes to them and their workers.

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Member Avatar jarrjarr (20.57) Submitted: 4/5/2011 5:43:37 PM
Recs: 1

I think you are going to be wrong on this for all the reason you state and HMC will do the opposite making this a prime buying time to get into the company for the long-term. Only time will tell which of us is right of course.

Member Avatar TSIF (99.96) Submitted: 4/6/2011 5:29:14 PM
Recs: 1

Who is right? Depends on your timeframe. Per my comment, this will hurt them in the short run, which can clearly vary by definition. At this point they are down 10% in the last ten days since I made my call and 20% since the earthquake. I do wish them well, but no production, no product, they have more to sell off. They were one of the stronger company's and should weather this in the long run. Good luck.

Member Avatar akakroke (< 20) Submitted: 10/7/2011 4:53:49 PM
Recs: 1

This was a good read; thanks to both of you.

I bought 2 new fully loaded Honda CR-Vs in February, 2011 and figure giving my and my wife's ages, they will last us until we can no longer drive.

I JUST bought a new, super Honda snow blower ("The model you purchased was received last Thursday and built last Friday and is the new HS1332TAS. Give a call when you are ready for delivery.") which has a 20+ year life cycle and which will do all the work for me here in New England.

In any event, prior to 2011 I never bought any Honda product. I'm thinking my behavior just might be an indicator of things to come with this company and research this past month progonisticates an ever increasing demand in the greater Asian countrys. It will be interesting to see how the stock performs. I don't plan to buy it until 01/2012.

Akakroke

Member Avatar TSIF (99.96) Submitted: 10/7/2011 5:30:21 PM
Recs: 1

Hi akakroke, I closed the pick a long time ago, but I guess no one else has written a down pitch that got a rec since then. It's hard to say how much of their 23% downsizing since my call was the earthquake and how much was the economy. They have managed to keep an outstanding name and are well respected. US car company's are coming on strong the last few months. It will be interesting to see how the mix shakes out over the next few years. Honda has a lot of loyalty in Japan and I don't see US cars competing with them globally.

I hope your two Honda's last you and your wife through many productive years of driving. I would trust them for snowblowers here in New England as well, maybe global warming will kick in at some point and you won't have to use it as much!!!

Best wishes.

Member Avatar techfule (< 20) Submitted: 12/12/2011 3:44:54 AM
Recs: 0

Once you don't need the snowblowers anymore you can buy a Honda lawnmower instead. What differentiates Honda from most other car companies is the mix of products includes scooters, motorcycles, lawnmowers, snowblowers, generators, and corporate jets. Outside the US, the market for scooters and motorcycles is a serious transportation segment, not just recreational, and Honda is uniformly at the top of it in quality and longevity.

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