Five interesting things that Hodges Capital research analysts discovered this week...
#1 AUTO INVENTORY: Although supply chain pressures appear to be improving for auto manufacturers, few cars remain in inventory, and 2022 is likely to be a year of significant restocking. According to Fundstrat, U.S. auto makers currently have roughly 61,700 vehicles in inventory compared to the industry’s 70-year average inventory of 1,287,242 vehicles.
#2 BUILDING MATERIALS: The National Association of Home Builders estimates that new single-family home construction spending for building materials represents $150 billion annual spending. The top five homebuilders account for roughly 18% of housing starts in the U.S. and represent roughly $28 billion in spending on building materials.
#3 CAGE-FREE EGGS: Resulting from several state mandates, the trend towards cage-free eggs in the U.S. may eventually take capacity off the market and increase the production costs of fresh eggs. Although the U.S. egg market has been oversupplied in recent years, roughly 28% of the egg production has been converted to cage-free capacity.
#4 LEVERAGE BUYOUTS: According to the Wall Street Journal, leveraged buyouts are back this year, with private equity firms announcing $944.4B of deals in the U.S. so far this year. Such buyout activity is 2.5X the same period a year ago and more than double the previous peak set back in 2007.
#5 COLLEGE FOOTBALL: The highest-paid college football coach in 2006 was Bob Stoops of Oklahoma, making $3 million a year. The highest-paid college football coach in 2021 is Nick Saban of Alabama, earning $9.75 million this year (source: USA Today).
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