Auto Sales Highest Since December 2007 But Miles Driven Per Captia Continues Downward

The news out today is auto sales for the Big 3 US car manufactures increased 8% in 2013 which helped push sales to the highest level since 2007. Couple this with the fact that the average age of the US car fleet is at a record 11.4 years, according to the Polk research firm, and it would seem that there are significant structurally reasons to be bullish on US car manufacturers.

However, if there was one reason to bearish it would be because total miles driven has plateaued for the past six years. This trend is even more worrisome when looked at from a per capita basis (total miles driven divided by non-institutionalized population over 16 years old), especially given the Millennial's aversion to owning cars.

Fiat's Stock Rises 16% Today, After Closing a $4.35B Deal For Chrysler

While none of the European automakers manage to pass our knowledge leaders screen, today's news prompted us to take a closer look at the group.
Most members of the sub-industry managed to perform well over the last year:



Valuations for the group have risen briskly in the last couple of years:



But mostly due to an outlier (Porsche):



On the balance sheet, debt has fallen over the last few years-- but so has investment in intellectual property:

(Net Debt as a % Capital)


(Intellectual Property as a % Assets)


More specifically, we see that BMW and Volkswagen are investing the most (R&D as a % of Sales) while Porsche, Fiat, and Renault lag the group:



Volkswagen also stands out with respect to profitability metrics such as ROIC:



Finally, in our point-and-figure chart work, the majority of this group's constituents appear to be attempting to break out of long established trading range patterns:

NYSE Margin Debt Keeps Making New Highs

NYSE released margin debt for November last week and it posted another new all-time high. However, the one-quarter moving average of margin debt as a percentage of total capitalization is still below the level it was at in April.

PMI's Indicate Decent Momentum Heading Into The New Year

The ISM Manufacturing PMI and Markit Manufacturing PMI both indicate that manufacturing activity in the US continued to expand in December. Over the last few years, it has seemed that the US economy had picked up momentum in the 4th quarter, however, the economy then struggled to maintain it in the beginning of each year. We will wait and see if the economy can keep the momentum on track in 2014.

Who Won and Loss The Holiday Week

Let's take a quick tour of who had the best and worst performance in the light trading week last week. We will start bottom-up and work our way up to the aggregates (and as usual all aggregate data is equal-weighted).

Top Performing Companies


Worse Performing Companies


Top Performing Sub-Industries


Worse Performing Sub-Industries


Top Performing Industries


Worse Performing Industries


All Sectors