Hyundai Motor Co. (NASDAQOTH:HYMTF)

CAPS Rating: No stars


Player Avatar TMFDeej (99.25) Submitted: 4/27/2011 1:31:10 PM : Outperform Start Price: $35.25 HYMTF Score: -18.51

As someone who works in the auto industry, I should have given the green thumb to Hyundai a long time ago. It sounds funny saying this with memories of its early vehicles still stuck in the back of my head, but Hyundai is one of the best automakers in teh workd today, bar none. Here's a company that just gets it. They make what consumers want, keep up with or ahead of industry trends like producing vehicles that get outstanding fuel economy, have dramatically improved their quality, and are still working on improving their image by doing things like including an industry-leading warranty on its products.Unlike my normal picks, there's no special situation here, Hyundai is just a well-run company. Period.Deej

Member Avatar TMFDeej (99.25) Submitted: 5/12/2011 8:37:59 PM
Recs: 0

One of the perks of working in the auto industry is being able to attend the media days of various auto shows. This gives one an opportunity to take a close look at the various models that are out there without having to fight the crowds (though the danger of getting between a journalist and free food is added to the mix). The press days also feature press conferences where manufacturers introduce new models and concept cars.

Last week I attended the New York International Auto Show. All of the usual suspects had displays, from Acura to Volkswagen. I was able to take a close look at a number of interesting models, such as the world's first mass produced plug-in electric vehicles, the Chevrolet Volt and Nissan Leaf. I saw a number of impressive offerings, but you may be surprised to hear what company I found to be the most impressive...Hyundai.

That's right Hyundai. Anyone who was around in the late eighties and remembers the first model that the company introduced to the U.S. market, the Excel (which was pretty junky), may be surprised to hear this, but I kid you not. Hyundai has come a long way since then (note the company also owns the Kia brand).

Several years ago, faced with consumers who were hesitant to purchase its vehicles because of previous quality problems Hyundai decided to improve its new vehicle warranty to 5 years or 60,000 mile bumper-to-bumper coverage and an astounding 10 years or 100,000 mile powertrain warranty. This move has worked wonders. It seems as though it convinced many consumers who liked the company's vehicles, but were hesitant to buy one because of its past quality problems to give them a try.

As a manufacturer' they just seem to "get it." Hyundai always seems to be ahead of the curve on industry trends and marketing campaigns. At a time when consumers are feeling the pressure of high gas prices, Hyundai now has four models that deliver 40 miles per gallon on the highway without the addition of any special packages. There's only a handful of other vehicles out there that can boast providing similar exceptional gas mileage, and most of them are special trim levels of models that are more expensive and even have to occasionally be special ordered.

Not only has Hyundai's quality and mileage improved, it is packing its vehicles with outstanding technological innovations such as its new Blue Link system, which offers the basic hands-free phone and other services that GM's OnStar provides plus a number of other improved features.

I found the company's presentation and vehicles so impressive that I did something that I should have done a long time ago, I requested that its ticker symbol, HYMTF.PK, be added here on CAPS.

This morning Hyundai announced that its first quarter earnings soared nearly 50%. It's a good thing that I went long Hyundai here in CAPS yesterday because in its home market of Korea its stock jumped more than 7%.

I've missed quite a run in Hyundai's stock, and it isn't this isn't my normal sort of catalyst-driven special situation type of investment, but but if I'm right about the company I'm sure that there's lots of gains yet to come over the next several years.

Featured Broker Partners