By CRM staff
Toronto, Ontario -- April 16, 2019 --
Boyd Group Income Fund investors have not been deterred by a Globe and Mail editorial that used the collision repair behemoth's stock example par excellence of an overbought stock investment trading on the TSX.
"Fundamental research is important for investors in this cast to verify that, after such a great rally, the future earnings growth prospects are accurately reflected in the price," Barlow wrote.
On April 5, columnist Scott Barlow highlighted the company, which was then (and now) trading at about $150, up from about $110 at the opening of 2019. When a stock is described as overbought, the implication is that buyer interest has driven the selling value above the intrinsic value of the business. Newspaper columns are often able to spur a market correction.
Cold Front for Canada’s Automakers?
Canada’s auto manufacturing business received $8.7-billion U.S. in investment, from 2009-2018, compared to $20-billion invested in Mexico and $73-billion in the United States in the same period, a report from the Center of Automotive Research has concluded.
While those numbers may sound low, Canada is still punching above its weight by investment dollars per-capita. With just 37 million Canadian, investment during the period is equivalent to about $225 dollars, compared to $223 dollars for Americans and $154 for Mexicans.
Despite this per capita premium, some analysts are saying Canada’s days as an auto manufacturing giant are numbered.
In 1999, Canada’s auto production reached its zenith, with 17.5 percent of all vehicles being manufactured in the Great White North.
By 2018, the country produced just 12.3 percent of North American cars. This year, with the expected closure of the General Motors facility in Oshawa, that number is expected to fall below 10 percent.
Automotive manufacturing—including parts—remains an immensely large portion of Canada’s economy, and makes up nearly a quarter of the country’s manufacturing trade. It employs more than 120,000 people in vehicle assembly jobs.
Despite the scale of auto manufacturing in Canada, the auto aftermarket is actually far more important—at least as far as job figures are concerned. More than 380,000 Canadians are employed in the aftermarket sector.
Volkswagen’s Emissions Imbroglio
Former Volkswagen chief executive Martin Winterkorn has been indicted on fraud and unfair trading charges by German authorities.
Winterkorn, along with four other Volkswagen executives, are accused of failing to prevent the use of software designed to cheat emissions tests, despite having known of its existence in 2014.
Winterkorn has previously denied knowledge of the software until the scandal received press attention in the autumn of 2015. Some of the other indicted executives are alleged to have been involved in the scheme as far back as 2006.
So far, the German OEM has paid about $40-billion in fines and penalties for the use of the software, though more financial punishments could be forthcoming.
Earlier this month, an EU regulatory body announced that it had had evidence that Volkswagen, BMW, and Daimler had illegally agreed to slow the roll-out of new emissions-lowering technologies in their vehicles.