Let’s discuss this thesis. A helluva lot of recalls announced and Fitch has a negative watch on the company. We’re trading at 2004 prices (not including 2008ish) for, as my friend put it, one of the most studied companies in MBA operations management classes. What are your thoughts?
Hi Ali, Not undervalued. Not a buy.
Probably. Perhaps more interestingly, Toyota car prices have dropped since the news. This might be a good time to get that 2009 Lexus.
FA, what’s your reasoning? Can you go on Gmail? I’ll explain the oil and gas accounting questions you have there
Ali, I can’t get on gmail right now. I’m at work. but i’ll get on later and we can talk for sure.
Wait. I think this lingers for a while.
JustPass Wrote: ------------------------------------------------------- > Wait. I think this lingers for a while. I agree, the stock might drop more because Toyota is going to take a beating for months. Lawsuits, Congress investigations, anecdotal cases all over the news… However, Toyota will survive in the long run. I am curious how other countries’ media are looking at this. It is clearly a benefit for the USA automakers to have this on the news 24/7. We own two Toyotas and one is in the recall. Personally, as long as they fix the pedal soon, I am ok. There is a flaw in that design, but I do not think this extrapolates to the quality of the cars has gone downhill. Cars get recall all the time, this just happen to be a serious mistake because of the consequences of accidents. Obviously I rather have my muffler fall apart than kill my entire family because my car is accelerating by itself. But I just do not think all the sudden a Camry is a terrible car. We will not be in the market for a new car in years, but as of right now, Toyota will still be in my top three choices along with Honda and Nissan.
Dont get me wrong I think its a serious design flaw, but it seems to me this has been WAY over done. If we had a nickle for every big 3 recall we would all be living free and clear in the bahamas right now. From my experience at an auto supplier, Toyota will come in and work with the supplier to correct every last issue there is. Ford or GM just comes in and demands that you write a check to recover their financial losses. I want the big 3 to pull through, but honestly, I’d still probably feel safer in a toyota with a sticky gas pedal than many of the other cars out there. Push the brake and shift the freakin car into neutral…
Even without this whole pedals problem and at current prices, i wouldn’t say its undervalued. selling cars is difficult.
Let it take another dip or two and then buy. I would be cautious in putting too much money to buy large stake though. TM is going nowhere and it is still better than F, GM etc.
AlexP Wrote: ------------------------------------------------------- > We own two Toyotas and one is in the recall. > Personally, as long as they fix the pedal soon, I > am ok. There is a flaw in that design, but I do > not think this extrapolates to the quality of the > cars has gone downhill. Cars get recall all the > time, this just happen to be a serious mistake > because of the consequences of accidents. > Obviously I rather have my muffler fall apart than > kill my entire family because my car is > accelerating by itself. But I just do not think > all the sudden a Camry is a terrible car. > > We will not be in the market for a new car in > years, but as of right now, Toyota will still be > in my top three choices along with Honda and > Nissan. Agree. I would take a Toyota recalled four times, with 30K miles and minor paint scratches instead of a brand new Ford, GM, or Chrysler hands down.
i think its under valued (should be around ~75-76)
I’m hoping for a 0% financing deal out of this in a couple of months. I could see myself buying an extra car just because it’s a good deal
Value investors, all of you
I kick myself for not shorting TM. I was reading about these pedal problems 6 months ago on the car forums I subscribe to. FUUUUUUUUU
TheAliMan Wrote: ------------------------------------------------------- > Value investors, all of you Not sure about this, but this is definitely not a “typical” value stock. Maybe Warren Buffet’s version of value which relies more on future growth but by most measures, this company is still “expensive”. I say another 30% less, than it would show some semblance of value on some measures. This is by no means similar to american express or geico. but hey, what do I know. i can’t even get an interview.
If you think the $/Y rate will head back towards its 10 year average of the 110 region then Toyota is a buy. Not sure I’d buy it on fundamentals just because the auto industry is so capital intensive and competitive that it is very hard (if not impossible) to remain consistently profitable.
A lot depends on Toyota’s strategy. It must be worth revisiting Audi’s actions around 20 years ago when they had a similar problem.
this may forever change consumer sentiment towards Toyota…remember the Ford and the $0.12 fastener debacle? this could kill their brand image if not handled properly and the other auto makers will most likely capitalize on this as much as they can with subtle messages that say “hey, we dont cover up huge scandals like TM does”
Chrysler already started giving discount to the customers who moves from Toyota to Chrysler.