Ford and GM are Smokin ‘on the accelerated turnover

Ford and GM are Smokin ‘on the transaction, which accelerates
Be more economical Impounded supply and demand and are more than offset higher gasprices
 
A cornerstone of the investment thesis on the stock of cars for years the existence of a large backlog. Fortunately, the latest monthly sales figures that are the drivers finally abandoned their trade for new vehicles – the shares of Ford Motor (NYSE: F) and General Motors (NYSE: GM), is more closer.
 
The slow pace of recovery is difficult and high unemployment, Americans continue their vehicles longer than ever before the lead. In fact, people cling to their cars and trucks for record lengths of time, according to data from market research firm RL Polk & Co. The average age of cars on the road now stands at more than 11 years. In 1995, this share was only 8.4 years.

 
It is therefore not surprising that industry-wide new vehicle sales have exceeded an annual turnover of 14 million dollars for two months in a row – and only reached the highest level in four years. Ford said February sales rose 14%, while GM a profit of 1.1%. Chrysler, now controlled by Italy’s Fiat reported a significant increase of 41%.
 
The results were equally more than offset the diversion of gas prices for non-American cars, such as aging fleets and fuel consumers. Toyota Motor (NYSE: TM) saw sales increase by 12.4% in February. Nissan Motor (PINK: NSANY) said sales rose 15.5%, while Kia Motors gained 37.3%. Volkswagen (PINK: VLKAY) increased by 42.5%.
 
The Big Three sold an average of almost 17 million vehicles per year for ten years in the 2007th last year, vehicle sales in the U.S. fail to reach 13 million, but they are now back on the rise. RL Polk expects U.S. sales to recover from the recession of around 16 million by 2015.
 
Other models of low consumption suggested that acceleration of sales and strategic alliances that the actions of Ford and GM are still an attractive, even after its recent gains.
 
Despite the recent announcement by GM, the production of the Chevrolet Volt electricity demand will cease to supply to catch up. The company is on a roll. GM posted record earnings last month only two years after the taxpayers rescued. (GM 32% of the Treasury Department is one.)
 
Moreover, an amount of 7% in the Peugeot-Citroen, the type of European partnership that served so well in Chrysler. (Remember that most observers at Fiat took control of the car spotted in the U.S.).
 
And even after the recovery of 14% in the last three months, the assessment of GM still looks attractive. In 5.4, before the effect of the price-earnings (PE) with a reduction of 25% of its own long-term average, according to Thomson Reuters. GM PEG (price / earnings growth ratio), the rate, based on a population increase in its growth prospects, is trading 35% below their long-term average.
 
Meanwhile, objective analysts, the average price $ 34, so that the implied increase of 38% over the next 12 months or less.
 
Ford shares also trade in valuations in most cases, to negotiate, despite the addition of 9% over the last three months. The shares trade is at a discount of 26% on his own five-year average earnings before one-time and 73% at the end of physical education. PEG is only seemingly a bit expensive, shared strong trade at a premium with their own five-year average.
 
The analysts average price target is $ 16. Add in the dividend yield of 1.6% and increased to 33% implies.
 
Car manufacturers in the U.S. have undergone a remarkable transformation, and both Ford and GM have to go a long way. Historically, a sharp increase in gas prices, sales of new vehicles were affected. But, as David Rosenberg, chief economist and strategist at Gluskin Sheff say, should help the backlog and economical fleet, some of the impact of rising gas prices at this time. If the sale can maintain its momentum, Ford and GM stock should continue to accelerate.