Stocks & Equities

4 Stocks to Profit from the Luxury Auto Boom

Rolls-Royce, Ferrari, Bentley, Lamborghini, Porsche, Aston-Martin, Maserati, BMW, Jaguar, Audi, Alfa Romeo

When I was a teenager, I dreamed about owning a Porsche or Ferrari. Of course, that was when I had no cash and even less in the way of brains.

Alas, I will forever be the son of a frugal farmer. So, a Ford or Chevy pickup will do just fine for me, thank you.

But hey, a lot of people feel very differently. Wherever I go in the United States, I see a lot of BMWs, Mercedes, Range Rovers, and other expensive luxury/sports cars.

What amazes me, however, is the number of luxury cars I see in Asia.

The streets of Tokyo, Taipei, Singapore, Kuala Lumpur, Bangkok, Shanghai, and Beijing have just as many — if not more — of those high-priced luxury/sports cars as any city in the United States.

That’s quite a change from 20 years ago when the primary mode of transportation in China was a bicycle. Those days are long gone, and a whole new era … and the whole new set of investing opportunities that come along with it … is upon us.

Today the streets of major Chinese cities, such as Beijing and Shanghai, are so clogged with cars that it can take hours to travel just a couple of miles.

In fact, China is now the largest auto market in the world, and car-makers from all over the world are tripping over each other to get into China.

Those carmakers gathered at the 2013 Shanghai Auto Show, the largest event of the year for the automobile industry.

Yup, you read that right — with 1,300 cars showcased this year, including the debut of more than 100 new models, it’s even bigger than the Detroit Auto Show!

The World’s Top Auto Market
Aims to Keep Ruling the Road

China has been the leading auto market in the world since 2009. But consulting firm McKinsey & Co. predicts it is going to get even-bigger.

Some 200 million Chinese have driver’s licenses, and McKinsey expects auto sales there will grow by an average of 8% a year between now and 2020.

But even though the typical car buyer is about a decade younger than his or her U.S. counterpart, as the CEO of Jaguar Land Rover told CNBC last week, they’re not intent on buying old beaters or simple models to get them from Point A to B.

Instead, they want something that screams “status car,” to reflect their growing incomes and the place in society they’re increasingly occupying.

That’s why China’s luxury-vehicle market is where the big bucks are being made. And that’s a market you can easily tap into without putting a single mile on your own car!

Big Price Tags, 
Bigger Potential Profits

Every carmaker in the world — including Rolls-Royce, Porsche, Ferrari, Bentley and Lamborghini — from 20 countries flocks to Shanghai for good reason: to get in front of China’s growing pool of potential buyers.

McKinsey expects luxury cars sales to grow by an impressive 12% a year over the same period.

This leaves the potential for them to go even-higher because “Demand outstrips supply for our vehicles,” said Klaus Maier, the president of the China Mercedes-Benz division, as he recently told Bloomberg.

If you want to tap into the luxury auto boom, there are several ways to do so. Here are four “options” that could pick up some serious momentum …

Option #1: BMW (BAMXY.PK). BMW are extremely popular in China. Last year, sales there soared by an amazing 40% to 326,000 vehicles.

BMW, by the way, also owns the Rolls-Royce and Mini brands.

Option #2: Porsche (POAHY.PK). The younger Chinese millionaires prefer speed over comfort, and Porsche is making a killing in China.

Not surprisingly, Porsche just announced that it enjoyed its best March EVER in company history.

The company sold 37,009 cars in the first quarter, a 21% increase, but a big chunk of that gain came from China. There, Porsche sold 8,844 cars in the first quarter, a 25% bump from the same period last year.

Plus, Porsche has a nice kicker in that it owns 18% of Volkswagen, so you get both VW and Audi exposure when you buy Porsche stock.

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Even though these higher-end vehicles may cost a pretty penny, that doesn’t mean they won’t require some serious upkeep over the years.

And so, you may want to look toward a pair of Chinese auto parts stocks that are traded in the United States on the Nasdaq that could benefit from China’s car-buying boom:

Option #3: Chinese Automotive Systems (CAAS), a leading supplier of power-steering components and systems for Chinese passenger automobiles and commercial vehicles.

Option #4: SORL Auto Parts (SORL) is a leading supplier of automotive brake systems and other key safety-related auto parts to automotive original equipment manufacturers, or OEMs.

Of course, as we discussed earlier this week, China’s economy “only” grew by 7.7% in the first quarter. So all the doomsayers are keeping a close eye on whether consumers are saving or spending their money.

But when it comes to luxury items like cars that many newly affluent citizens crave, I expect any potential shift in sales figures to be a mere pothole on the way to higher stock prices.

In fact, my Asian Century subscribers recently closed out a 100%-plus gain in just about eight weeks in an Asia-based car-maker. And just this week, I recommended another name that caters to a wide variety of Chinese and other global car buyers.

This stock is already in positive territory, and my research tells me it’s on the right track to zoom higher!

As always, if you’re doing this on your own, you need to do your homework and decide whether any of these securities are appropriate for your personal situation.

But as you know, timing is everything when it comes to investing. And there’s still time to get in on this new position in my trading service, The Asian CenturyClick here now to claim your risk-free trial membership today!

Best wishes,

Tony

Icona-Vulcano-front-side-viewRelated: Supercars.net & The 2013 Shanghai Auto Show, the largest event of the year for the automobile industry.

P.S. To get all the names of my favorite stocks — what’s working today AND what to buy as Asia’s growth continues to explode — get on board with all the profit opportunities The Asian Century offers today. Click here to get started right away!

Tony Sagami is the editor of The Asian Century, a trading service designed to help investors profit from the seemingly unstoppable Asian consumption machine. He helps his subscribers tap into this potential through a variety of easy-to-execute strategies on global companies that trade on the U.S. exchanges that also do big business in Asia. For more information on The Asian Centuryclick here.

Tony is also the editor of International ETF Trader, where he shows members how to make money from trends taking place all over the world in areas like natural resources, gold, oil, commodities, tech, consumer goods and even in individual countries themselves.

“Goofy Award: They Said Apple Was Going to $1000”

apple image1About six months ago everyone on TV and across the web was pretty much saying Apple’s stock would never go down. They said $1,000 for Apple shares was a foregone conclusion. And Apple shares certainly wouldn’t go down under $400 a share, that would be absurd to even consider. Well, yes, Apple shares most certainly have gone lower than $400 a share, and Apple shares are still hanging around $400 even after increasing their share buyback plan to $60 billion and raising their dividend.

And The Goofy Goes To:

Jim Cramer: “Thinking of Apple as a $1,000 stock is not “irrationally exuberant” as some have claimed, but likely a foregone conclusion.”

Andy Zaky: “Apple will reach $1,000 in late December or early January 2014″; His Apple hedge fund – yes he only bought Apple shares for his fund –  lost millions.

James Altucher: “Apple is definitely undervalued. It could easily find its way to $1,000.”
Gene Munster: “Now Munster is upping the ante, calling for Apple to reach $1,000 a share by 2014 and become the first U.S. company worth $1 trillion.”

Steve Wozniak: “People talk about $1000 stock price. At first you want to doubt it, but I actually believe that, and I don’t follow stock markets. Apple has that much growth left.”

Shebly Seyrafi of FBN Securities: “AAPL continues to be a strong new product story,” the analyst writes. “It has the iPhone 5 shipping soon, it is expected to have a new iPad mini shipping in FY Q1, China Mobile is a large opportunity for AAPL starting next year and the iTV is generally expected to be launched over the next year or so

Brian White of Topeka Capital: “Driven by an ever expanding portfolio of innovative products, a growing integrated digital grid, unmatched aesthetics and a brand that is able to touch the soul of consumers of all backgrounds, Apple fever is spreading like a wildfire around the world and we see no end in sight to this trend.”

……..And so many more

Jim Rogers Exclusive: It’s a “Race to Insanity”

imagesIf you are invested in the lofty stock markets of the United States or Japan, legendary investor Jim Rogers has a message for you …

Euphoric gains always lead to hangover pains – it’s just a matter of when.

“This is artificial, as I’ve [repeatedly] said,” Rogers told Money Morningduring an exclusive interview Sunday night. “This is the first time in recorded history where nearly all the central banks in all countries are pumping out lots of money, debasing their currencies, printing money. I’ve never seen this in history, and now we’ve got everybody – or nearly everybody – doing it.”

In a wide-ranging interview from his home in Singapore, Rogers also told us that:

  • The currency-debasing policies of the world’s central banks are a “race to insanity” that will likely do maximum damage to the global economy.
  • Inflation is a much-deeper-seated problem than the “official” statistics show, which means that gold, energy and agricultural commodities are must-have holdings.
  • And that Russia is the most intriguing potential investment target on his radar screen right now.

But a substantial portion of this article and Roger’s talks was focused on the current bubble in stock prices, which Rogers concedes can continue for some time.

…..read this thorough article HERE

 

Remarkably Jim Rogers is Michaels Money Talks Guest this weekend April 27th, and he wouldn’t if he wasn’t aware of the respect Micheal Campbell endgenders

Rogers first rose to fame when In a short 10 years Rogers Quantum Fund gained an astonishing 4200% vs the S&P 500’s gain of 50% during the same time period. 

So be sure to tune in to CKNW or  listen on the Money Talks Website to hear what he has to tell you and Michael in this exclusive Saturday interview beginning at 8:30 am PST. 

…..for the moment, read what he had to tell Money Morning recently about the “Race to Insanity”

 

Following the recent dramatic drop in gold prices, stocks may be next to plunge, warns Dhiren Sarin, chief technical strategist at Barclays, as the plunge in gold prices is a sign that markets have lost faith in central banks’ quantitative easing efforts.

“The breakdown in gold, in euros and U.S. dollars, tells us that some of the belief in quantitative easing measures has faded, and policies by central banks aren’t flowing through to investors,” Sarin told CNBC. “The asset class most vulnerable for a selloff after commodities is likely equities.” 

…..read more HERE

 

10 Things You Need To Know Before The Opening Bell

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  • Markets in Asia were mostly lower in overnight trading. The Japanese Nikkei fell 0.3% while the Shanghai Composite dropped 2.6%. European markets are higher across the board, with Spain leading the way, currently up 1.6%. In the United States, futures point to an unchanged open.
  • HSBC’s flash China manufacturing PMI fell to 50.5from last month’s 51.6 reading, missing expectations of a tick down to 51.5. Any number over 50 indicates expansion, so this latest reading indicates that manufacturing activity just barely continues to grow.
  • The German manufacturing PMI fell to 47.9 in Aprilfrom last month’s 49 reading, indicating an accelerating pace of contraction in Germany’s manufacturing sector. French manufacturing PMI rose to 44.4, ahead of estimates for a tick up to 44.1 from last month’s 44 reading. While the positive surprise is welcome, the numbers still suggest a deep contraction in French manufacturing.
  • According to the latest polling, Italy’s center-left party, which came out ahead in national elections several weeks ago, has now fallen into third place, behind Silvio Berlusconi’s center-right coalition and Beppe Grillo’s anti-establishment 5-Star Movement. The center-left party has suffered significant setbacks as it failed to form a government in the wake of the elections. Last week, its leader, Pier Luigi Bersani, resigned.
  • Netflix reported first quarter earnings that exceeded analysts’ consensus estimates, while revenues were right in line with expectations. The company added 3 million new subscribers in the quarter. Shares rose 24% in after-hours trading.
  • Coach is expected to report earnings of $0.81 per share and revenues of $1.18 billion this morning before the opening bell. Johnson Controls, also out this morning, is expected to report earnings of $0.42 per share on revenues of $10.48 billion.
  • The first economic data release in the United States is Markit’s flash PMI reading for April, due out at 8:58 AM ET. Economists expect the headline index to moderate to 53.9 from last month’s 54.6 reading, indicating a slowing yet robust pace of expansion in American manufacturing this month.
  • Released immediately thereafter at 9 AM is the February House Price Index. Economists predict that house prices rose 0.7% in February after advancing 0.6% in January.
  • March new home sales figures are released at 10 AM. Economists predict sales rose 1.2% from the previous month to a seasonally adjusted annual rate of 416,000 units after registering a 4.6% decline in sales in February.
  • The Richmond Fed’s monthly index of regional manufacturing conditions is also out at 10 AM. Economists expect the index to fall to 2 from last month’s 3 reading. Follow all of the data LIVE on Business Insider >
  • BONUS: Real Housewives of Atlanta star Porsha Stewart says she first found out about her divorce from former NFL quarterback Kordell Stewart on Twitter.