Will Honda Drive Ahead in 2013?

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With shares of Honda Motor (NYSE:HMC) trading around $38.13, is the automaker an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movementhonda insight

Honda ended 2012 on a strong note. The company increased its year-over-year December U.S. market share by 1.3 percentage points to 9.8 percent, making it the fifth-largest auto company operating in America. Total 2012 sales grew 24 percent compared to 2011, showing some acceleration toward the end of the year.

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What’s more, the company’s domestic units did phenomenally — domestic car sales were up 67 percent and domestic truck sales were up 22.5 percent. This also more than offset huge reductions in imports and was a reflection of Honda’s focus on broadening its manufacturing footprint in the United States. The company recently rolled its 1 millionth U.S.-made car off a line.

T = Technicals on the Stock Chart Currently Show an Uptrend

As of January 15, Honda’s stock price was 4.01 percent above its 20-day simple moving average, or SMA; 12.63 percent above its 50-day SMA; and 14.95 percent above its 200-day SMA.

Since the beginning of 2013, the stock price has been in an upward trend, rising 3.22 percent this year-to-date and rising 17.54 percent year-over-year. It’s hard to hide the fact that Honda’s stock has climbed tremendously since November — over 31 percent between November 13 and January 15 — and is currently trading near its 52-week high of $39.35.

As a benchmark, the S&P 500 has risen 3.24 percent year-to-date and 14.22 percent year-over-year.

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