Whether it's the corporate lunchroom, your cubicle, or the local watering hole after work, there are regular places we gather to discuss news, sports or -- if you're like us -- stocks. Here at Motley Fool CAPS, we gather around the virtual water cooler daily to rate stocks and delve into their merits as investments.
Our 135,000-strong CAPS community -- where members give the thumbs-up or thumbs-down to some 5,300 stocks -- has earned its points by seeking out the businesses it thinks will outperform the market. Below we'll take a look at some of the top stocks in the CAPS universe that you're talking about the most and whether you think they'll continue their winning ways.
| Stock | CAPS Rating (out of 5) | No. of Calls | % Outperform Calls |
|---|---|---|---|
| Honda Motor (NYSE: HMC) | **** | 1717 | 94.5% |
| Nike (NYSE: NKE) | **** | 1666 | 93.8% |
| Nucor (NYSE: NUE) | **** | 1715 | 96.0% |
| PetroChina (NYSE: PTR) | **** | 1731 | 95.0% |
| VMware (NYSE: VMW) | *** | 1753 | 91.7% |
A tall drink of water
Maybe it's a form of post-traumatic stress syndrome: After years of fighting the government at every turn in its efforts to raise car fuel efficiency standards (known by the acronym CAFE), Ford (NYSE: F), GM, and Chrysler have thrown in the towel and dutifully endorsed President Obama's 35.5-mpg industry standard for cars by 2016.
Battered, bruised, and on the government dole, the automakers just aren't in any condition to fight back against a program that will do little to help promote energy independence. Let's see: The new standards are expected to save 1.8 billion barrels of oil over the life of the program, and OPEC alone produces more than 31.3 million barrels a day. Does the expectation that the increased CAFE standards will achieve any meaningful reduction in our oil dependence make sense? After all, that savings amounts to only 58 days' worth of OPEC's production at current levels. And that doesn't even include everyone else we buy oil from.
Perhaps more confusing is that when the president and automakers are discussing 35.5-mpg CAFE standards, they're not discussing the EPA rating you see on a new car's window sticker. In fact, a car rated as getting just 26 or 27 mpg from the EPA standards would actually qualify as passing the 35.5 mpg CAFE standard, according to comments at the car-buying website Edmunds.com. It's the complicated way the two numbers are calculated that causes the obfuscation.
So there may be more to why folks from Ford, GM, Honda, Toyota Motor (NYSE: TM), and Nissan Motor all appeared on stage with the president. It wasn't that President Obama actually changed anything, since former President Bush actually signed the 35-mpg CAFE standard two years ago; he just moved up the compliance date by four years.
In addition, remember that CAFE actually stands for "corporate average fuel economy." In other words, that's a company-wide average. As long as enough models meet the guideline (again, 35.5-mpg CAFE, about 27 mpg EPA-tested), then they qualify. And many cars from all of the automakers already are there or within spitting distance. No wonder Detroit is supporting the new standards.
The 29 stocks in the CAPS Automobiles sector carry a below average two-star rating, which is indicative of how investors feel about the industry these days. Yet the stocks have enjoyed 16% growth over the past month. So maybe it's time to give automakers such as Honda another look. At least around the water cooler.
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