The past three years have been a rough ride for investors in U.S.-based automakers and suppliers.
Among automakers, every positive return on investment for the three years ending June 30 came from companies based in Europe or Asia, according to the latest Automotive News/PriceWaterhouseCoopers Total Shareholder Value Index. The only two automakers that delivered negative returns on investment for the period were the only two U.S.-headquartered automakers, General Motors and Ford Motor Co.
For Jeff Zaleski, automotive transaction services partner at PriceWaterhouseCoopers, those results reflect a basic investor desire for businesses to be diversified in different markets.
"Companies with balanced portfolios continue to outperform companies that are heavily weighted in more mature markets," he says.
It was little different among suppliers, Zaleski notes. Of the 11 global suppliers delivering negative returns over the past three years, nine are North American companies with a heavy emphasis on the U.S. market.
Suzuki Motor Corp. turned in the biggest three-year return on investment with a 300.7 percent improvement, according to the index. Its performance partly benefited from GM's move earlier this year to sell much of its 20.4 percent stake in Suzuki. But it also stems from Suzuki's ongoing efforts to lessen its reliance on sales in Japan.
Korea's Hyundai group delivered the second-best three-year shareholder return with 238.8, thanks to its sales success in overseas markets, including the United States.
Fiat S.p.A., which also saw its ties to GM wind down during the past year, led the industry in one-year returns, with a gain of 82.9 percent.
Tenneco Inc. vastly outperformed the supplier industry for the three-year period, delivering a 622.2 percent return for investors. Tenneco stock was selling for about $2.40 a share at the start of the three-year period in 2003, as it restructured operations in North America and Europe. Last week the stock was selling in the $23-a-share range.
Collins & Aikman was tops over the past year and Delhi Corp. returned the most value in the second quarter. But those gains reflect the deflated stocks of those companies, both of which are in Chapter 11.
Four retailers suffered stock setbacks during the second quarter of this year. But all of the pubicly traded U.S. retail chains have posted gains in the one-year and three-year measurements.
Group 1 Automotive of Houston topped both the three-month and one-year indexes. The company had posted an operating loss in early 2005 but bounced back over the past year enough to increase its quarterly dividend in May 2006.
Positive business trends at UnitedAuto Group Inc., of Bloomfield Hills, Mich., prompted a 2-for-1 stock split there in May 2006. That helped put the retailer ahead of the segment with a 103.5 percent three-year shareholder return.
You may e-mail Lindsay Chappell at [email protected]