Displaying items by tag: selfdriving cars

(Detroit)

The auto sector has had a pretty wild ride since the Financial Crisis. The first half decade after the bailout was pretty strong for autos, with sales growing and high margin SUVs jumping in volume. However, the shift to SUVs and away from cars has grown so great that it is causing the industry some headaches. Further, self-driving cars are a new source of opportunity, but also anxiety. A new survey shows the car industry is likely to join energy and retail as the most embattled sectors this year. Sales are widely expected to fall across the industry, putting further stress on car companies.

FINSUM: In great industry-speak, the threats facing the industry are currently called the “Bermuda triable: unfavorable economic conditions, disruptive forces, and changing consumer preference”. We can’t help but agree.

(New York)

One of the best ways to pick stocks is to look at insider purchases. When those in-the-know on a company are buying stock with their own money, it is a probably a good time to pay attention. Well, one well-known but dormant stock (in terms of insider purchases) just saw a significant move—Goodyear. One of the rubber company’s board members just spent about $650,000 to buy 35,000 shares of the company. There has not been an insider purchase that large at Goodyear since at least 2004.

FINSUM: We obviously don’t know the catalyst for this buy, but the chatter about how tire companies will benefit in the long-term from self-driving cars (i.e. more miles driven because it is cheaper to keep the cars moving than park them) seems like a strong fundamental.

(San Francisco)

In what seems like a dramatic development considering all the other news that comes out on self-driving cars, people close to the situation say Waymo, Google’s self-driving car subsidiary, will launch an autonomous car service next month. The service is supposed to compete directly with Uber and Lyft.

FINSUM: Doesn’t this seem a little soon considering how recently fatal accidents were occurring? This could be a frivolous headline, but it could also be a major technological moment and potentially a good time to buy Alphabet.

(New York)

Technology, trade wars, and social attitudes are changing the world and economy rapidly. How can investors adapt their strategies to keep up and “future proof” their portfolios? Well, Barron’s has run a piece doing just that. The stocks chosen include: Bridgestone, BNP Paribas, Lix, Dabur India, and Bharti Infratel. Bridgestone, a Japanese tire company, seems as though it would be hurt by tariffs and the rise of Uber. However, the opposite is the case, as most tires are made close to where they are sold (so no tariffs), and the rise of Uber and self-driving cars will actually increase the most important performance metric for tire companies: miles driven.

FINSUM: We wrote an article espousing tire makers a few months ago but we like the view even better now. No matter who, or what, is driving a car, rubber will still meet road, meaning tires will be in demand. Further, since parking for self-driving cars may be expensive, we can imagine fleet operators keep them driving around 24/7, increasing demand for rubber.

(Detroit)

General Motors is ramping up its efforts in the self-driving car space. In what has become somewhat of a new age automotive space race, the company is doing well in its testing of autonomous vehicles. That said, it is still well behind the performance of Waymo, Google’s self-driving car unit. GM’s vehicles are getting very autonomous, with a human driver only needing to intervene 0.797 times for every 1,000 miles driven in 2017, down from 18.51 in 2016. Google’s number is 0.179 per 1,000 miles. Some criticize this “disengagement” metric because it is not well controlled or defined.

FINSUM: There is probably a little bit of “play” in how these stats are recorded, but if they are anything near the truth, the technology sounds like it is performing very well. GM says it wants to debut self-driving cars in 2019.