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Toyota Motor Corporation (NYSE:TM) is the world’s largest automobile manufacturer by volume. With shares trading around $85.92, is TM 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:
The major news event affecting Toyota this year is an ongoing territory dispute between China and Japan that resulted in tremendous sales and production cuts. Anti-Japanese sentiment in many parts of China led to demonstrations against the automaker and other Japanese companies.
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Chinese sales in September dropped 49 percent, followed by a 44 percent sales drop in October, and a 22 percent sales drop in November. Sales in China for the first 11 months of the year were down 3.3 percent to 749,600 units, a far cry from the 1 million target level established toward the beginning of the year.
Chinese deliveries in the July-September quarter dropped a record 23 percent.
T = Technicals on the Stock Chart are Strong
The stock price was recently 1.54 percent above its 20-day simple moving average, or SMA; 6.75 percent above its 50-day SMA; and 7.25 percent above its 200-day SMA.
Since the beginning of 2012 the stock price has been in a fairly pronounced upward trend, rising 29.87 percent this year to date and 29.16 percent year over year.
As a benchmark, the S&P 500 has risen 12.87 percent year-to-date, and has risen 15.80 percent year-over-year.
For comparison, General Motors Company (NYSE:GM) has risen 21.76 percent, Ford Motor Co. (NYSE:F) has risen 3.05 percent, and Honda Motor Co., Ltd. (NYSE:HMC) has risen 7.12 percent this year to date…
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