For example, at a trough, just before the economy begins to recover from recession, one would expect that cyclical industries, those with aboveground sensitivity to the state of the economy would tend to outperform other industries. Examples of cyclical industries are producers of durable goods, such as automobiles or washing machines,” It means that sales are particularly SENSITIVE to macroeconomic conditions. Other cyclical industries are producers of capital goods. Goods used by other firms to produce their own products. These above written facts are absolutely related to the auto parts industry, which could mean that their industry should be very sensitive comparing to other industries, In English the UAPITA goods industry is going to bear the brunt of slowdown BLITZ does well in an expansion, have used historical data of the five stocks to calculate sigma, betas etc. Based on realized returns eve can estimate mean returns and volatility as well as the tendency for security returns to co-vary_ Company Information about the researched firms: American Inc.
ARGON: Nasdaq; Cyclical Consumer Goods & Services/Auto / Truck / Motorcycle Parts American Incorporated (American) designs, develops and markets products based on its advanced, efficient thermoelectric device (TED) cosmologies for a range of global markets and heating and cooling applications. The Company’s principal product is Climate Control Seat (CSS), which it sells to automobile and light truck original equipment manufacturers or their tier one suppliers. The CSS provides year-round comfort to automotive seat occupants by producing both active heating and cooling.
As of December 2009, it had shipped approximately 5. 3 million units of its CSS product to customers. Its CSS product is offered as an optional or standard feature on 44 automobile models produced by Ford Motor Company General Motors, Toyota Motor Corporation, Ionians, Data Motors, Ltd. And Hounded, Epic] American stock prices started to fall at the beginning of 2008 . In my understanding it means that they depends on General Motors very much, and that time GM has not so good performance.
They lost their competitive advantage and this is showed via chart in case of American as well, Half year later the financial crisis hit them till the bottom, but as you can see and thanks for interventions and bailouts they started to come back very nicely. However the stock price is still the half ( 7,5$ ) as it was. Williams Controls Inc. WOMB: Nasdaq; Cyclical Consumer Goods & Services/Auto / Truck Motorcycle Parts Williams Controls, Inc. Designs, manufactures and sells electronic throttle controls and pneumatic controls, and the Company has begun selling electronic sensors for heavy trucks, transit buses and off-road equipment.
The Company also produces a line of pneumatic control products, which are sold to the same customer base as its electronic throttle controls. These pneumatic products are used for vehicle control system applications, such as power take-offs and air- control applications. The Company also sells sensors as separate product line, which includes two sensor technologies: contacting and Nan-contacting. The Company sells the majority of its products directly to heavy truck, transit bus and off-road original equipment manufacturers worldwide, Its customers include The Volvo Group, Pacer, Inc. Daimler Trucks AN, Invariants International Corporation, Caterpillar, Inc. And Hounded Motor, Co. [pick] WOMB stock prices shows fall in the early 2008. As have mentioned before, this was the beginning of the crisis of American Automobile industry. The stock prices were declining dramatically after 15 Swept 2008. For them the worst time was at the beginning of 2003. Commercial Vehicle Group Inc. CIVIC: Nasdaq; Cyclical Consumer Goods & Services/Auto / Truck / Motorcycle Commercial Vehicle Group, Inc. C.V.) Is a supplier of fully integrated system solutions for the global commercial vehicle market, including the heavy-duty truck market, the construction and agriculture markets and the specialty and military transportation markets. The Company’s products include static and suspension seat systems, electronic wire harness assemblies, controls and switches, cab structures and components, interior trim systems (including instrument panels, door panels, headliners, cabinetry and floor systems), mirrors ND wiper systems specifically designed for applications in commercial vehicles.
C.V. classifies its products into five general categories: seats and seating systems, electronic wire harnesses and panel assemblies, cab structures, sleeper boxes, body panels and structural components, trim systems and components, and mirrors, wipers and controls, Based onto he chart CIVIC seems very sensitive firm later am going to compare betas and standard deviations. Fuel Systems Solutions Inc. FAYS: Nasdaq: Cyclical Consumer Goods & Services/Auto / Truck / Motorcycle Fuel Systems Solutions, Inc. Fuel Systems) designs, manufactures and supplies alternative fuel components and systems for use in the transportation and industrial markets. Its components and systems control the pressure and flow of gaseous alternative fuels, such as propane and natural gas used in internal combustion engines, The Company also provides engineering and systems integration services to address its individual customer requirements tort product performance, durability and physical configuration.
It supplies its products and systems to the market place through a global distribution network of over 360 distributors and dealers in more than 70 countries and more than OIC original equipment manufacturers (Memos). In September 2010, the Company completed the purchase of Voted LLC an alternative fuel automotive systems developer in North America. Fuel Systems Solutions, Inc is a produces globally. Their smart portfolio strategy helped them to come out very quickly from’ the mud of crisis. Alternative fuel system has potential for the future, investors and governments are pushing this industry.
In my opinion this can be an explanation of the quick recovery. Gentle Corporation GNAT: Nasdaq; Cyclical Consumer Goods & Services/Auto Truck / Motorcycle Gentle Corporation designs, develops, manufactures and markets products employing electro-optic technology: automatic-dimming review automotive mirrors with electronic features and tire protection products. It also develops and manufactures admirable windows for the aircraft industry and non-automatic- dimming review automotive mirrors with electronic features.
During the year ended December 31 2009, the Company began shipping auto-dimming mirrors with rear camera display (RCA) for the Ford Fusion and Mustang Mercury Milan,’ Aka Porte, Morning, Virus and Sorenson; Toyota Tundra, Sequoia, Pries and Corolla Verso; Lexus REXES: Dadaists Mira Cocoa; Mediumistic Eclipse and Eclipse Spider; Accuracy MID and RD; GM Terrain; and Chevy Equinox. It also began shipping auto-dimming mirrors with RCA for dealer or port-installed programs for Mediumistic, Toyota, Ionians and Suburb, My first purpose is to show that am aware Of the meaning beta, sigma and correlation.
Financial markets , corporate finance, macroeconomics seminars gave a good knowledge to discover the associations behind the number. STANDARD DEVIATION Briefly Standard deviation shows the spread or extent of the share prices changes comparing to the average. A Potential drawback of to use it as measure f risk is that standard deviation can treat positive and negative deviations from the calculated returns, Many times I have calculated negative Standard deviations, which shocked me. Based onto he books we should find negative numbers just in special cases.
Low standard deviations shows that they were close to the mean during the time of changes, whereas high standard deviations indicate that there were significant changes comparing to the average, ( mean). From the attached table of Standard Deviations it is obvious that the company shares were less volatile before the collapse of Lehman brother. After the restricted of financial crisis every company has a higher standard deviation, The LIST market became unbalanced. It took one year to recover the whole market.
The historical prices of stocks shows the way very clearly They have decreased constantly and just at the end of the term they started come up from the deep water.. CIVIC Standard deviation has grown by 300%. But almost in every case we can discover dramatic rises. What is the secret of CIVIC? Over the last 10 years, continuing growth was achieved organically and though additional global acquisitions such as Ammonia Wire in the United States and Mexico and C. I. E. B. ND PEEK in the Czech Republic. In my opinion they have invested quite a lot money into acquisition.
After the financial crisis maybe the company need more time to recover and they cannot invest into other sectors so the impact of financial crisis so more serious than by their competitors. Returns shows contract low level. BETA Beta is also a measure of risk and the sensitivity of stock’s returns to the return on the market portfolio. Have calculated beta and on the figures it performs as the slope of the diagram. The benchmark is SSP 500, however was thinking about seeing NasDaQ According to the CAMP beta is a systematic sis that cannot be diversified away.
We hue to know that beta is measuring the covariance movement and not the volatility. Have provided graphs to illustrate betas better_let also shows r-square, which means that in practice 0. 03565 means that 3. 56% of the stock’s performance is explained by its risk exposure, as measured by bet& Analyzing Beta of stocks table it seems that in most cases the risk = beta has grown after 15 Swept 2008. ARGON 2,2565 increased to 2,4891. The most significant rise Of beta was CIVIC from I , AS to 2,39. As CIVIC stock diagram shows they are still on low level.
Why has decreased betas of WOMB and FAYS ??? As know beta shows risk, so in financial crisis every company should show bigger beta as in the previous period. EVEN so beta so WOMB and FAYS has decreased which financially means that these stock are not so risky as they were before. Could explain it as a reaction of the bailouts and the sensitivity. The US government reacted firstly for the crisis. The big Automobile manufacturers were helped , so as Auto parts industry depends on auto manufacturers, the bailouts has a very good effect for the stocks of capital goods sector.
