American Axle and Manufacturing Bonds, Short Term, High Yield, Fixed Income Investment, Yielding 6.7% YTM

This week, Durig looks at the auto industry to focus on a manufacturer who supplies components to many of the industry’s leader auto makers. American Axle & Manufacturing (NYSE:AXL), a leading supplier of driveline technology, recently released its second quarter results.  The company registered solid free cash flow, net cash from operations and improving EBITDA and EBITDA margins (see bullets above).

Hertz Bonds, Short Term, High Yield, Fixed Income Investment, Yielding 6.5% YTM

For this week’s bond review, Durig Capital ventures into the auto world to look at one of the leading auto rental companies in the U.S. and around the world. Hertz Global (NYSE:HTZ) had a fantastic 2018 and 2019 looks to be shaping up much the same.

  • First quarter 2019 is the seventh consecutive quarter the company has recorded year-over-year growth.
  • Total revenues were up 2% (during one the company’s historically slow quarters), up 4% on a constant currency basis.
  • Revenues in the U.S. grew by 7%.
  • Cash flow provided by operating activities grew by 28% over first quarter 2018.
  • First quarter 2019 interest coverage of 3.4x.

Auto Ventilated Seats Market Growing Significantly

In the recent years, automobile market has grown significantly in terms of sales, with considerable growth in the luxury cars segment. This is one of the reasons why the global auto ventilated seats market is also expected to witness gradual growth during the forecast period. This growth is attributed to increasing demand for luxury cars, increasing disposable incomes, and technological advancements in seat ventilation feature to be offered with mid-size and economy cars.

Head-Up Display Market Witnessing Substantial Growth

According to a recent report published by Future Market Insights titled, “Head-Up Display Market: Global Industry Analysis (2012-2016) and Opportunity Assessment (2017-2027)”, the global head-up display market is expected to witness substantial growth across the globe with demand from end-use sectors rising at an extensive rate. The advancements in technology and the invention of bleeding edge technologies along with the presence of numerous devices running with Internet connectivity and the adoption of wearable devices are increasing exponentially.

Gasoline Direct Injection Market to Expand Vigorously

As mobility demands of consumers continue to surge, the demand for automobiles or vehicles with efficient engines rises. The statutory premise of fuel-emission standards exercised across multiple regions brings more diversity and complexity for OEMs. Leading automakers are actively employing fuel injection technologies to comply with this diversity and develop engines for the future automobiles. Gasoline direct injection technology is a key part of the umbrella for advanced fuel-injection technologies, wherein high pressure instrumented on fuel is driving down the overall fuel consumption of a vehicle.

Automotive Side Impact Beams Market Driven by Demand

Automotive side impact beams are equipped in vehicles as a safety feature designed to protect passengers and drivers in the event of a side impact crash. When a collision takes place, automotive side impact beams absorb the energy generated during the collision. The passengers and drivers involved in side-impact collisions generally get severely injured as compared to other collisions.

Car Rental Services Market Going Fast

Future Market Insights (FMI) presents a revised forecast of the global car rental market for the period 2017-2027 in its published report titled “Car Rental Services Market: Global Industry Analysis (2012 – 2016) and Opportunity Assessment (2017–2027).” In terms of revenue, the global car rental market is estimated to expand at a CAGR of 6.6% over the forecast period, owing to numerous factors, about which FMI offers thorough insights and forecasts in this informative report. The market is segmented on the basis of end use, customer type, sector, booking type and car type.

Drive Home Over 10% YTM from Hertz Global, Bonds Mature October 2022

This week’s bond review ventures into the auto world, specifically car rentals. Hertz is one of the leading auto rental companies in the U.S. and around the world. The company recently posted its financial results for its third quarter, presenting solid evidence that the 2017 Transformation Plan is continuing to bear fruit. Some of the company’s excellent Q3 results include the following:

 

  • A 52% increase in in global net income.

  • U.S. adjusted corporate EBITDA increased by 25% year-over-year.

  • Revenues for U.S. operations also increased 10% year-over-year.

Find 9.4% Yield-to-Maturity with Hertz, Bonds Mature October 2022

This week’s bond review ventures into the auto world, specifically car rentals. Hertz is one of the leading auto rental companies in the U.S. and around the world. The company has posted three back to back quarters where global revenues have increased year-over-year. It’s most recent quarter registered an 8% increase in total revenues, with adjusted corporate EBITDA improving by $51 million. For Q1, the company also posted solid cash flows from operating activities of $401 million as well as an outstanding interest coverage ratio of 3.5x.  Hertz has also recently begun a revitalization plan to improve its U.S. based revenues, including improving its technology platforms, customer service, marketing and fleet optimization. The company’s 2022 bonds, with a yield to maturity of around 9.4%, offer a fantastic opportunity to add diversification into the retail / consumer auto industry and make an ideal addition to Durig Capital’s Fixed Income 2 (FX2) Managed Income Portfolio, the recent performance of which is shown below.