Friday Fast Five - 8/12/2022
by Hodges Investment Team, on Aug 12, 2022 7:00:00 AM
Five interesting things that Hodges Capital research analysts discovered this week...
#1 MANUAL TRANSMISSION: In 2000, more than 15% of new and used cars sold by the auto retailer CarMax came with stick shifts; by 2020, that figure had dropped to 2.4% according to The Atlantic.
#2 BIG GOVERNMENT: According to Strategas, federal tax revenues as a percentage of GDP are at their highest post-WWII level ever, at 20%. In the past, tax revenues of 19.3% of GDP or greater have allowed the US government to post a budget surplus, and the US government is currently running a deficit of 4% of GDP.
#3 CANADA HOUSING: The housing downturn in Canada is gaining momentum in some key Canadian markets according to Hedgeye. Toronto home sales fell -47% Y/Y in July and the home price index fell -4% M/M. Vancouver home sales fell similarly in July coming in at -43% Y/Y with home prices down -2.3% M/M.
#4 USED VEHICLES: Manheim Consulting released its Used Vehicle Value Index for July. The overall headline result was down 0.1% vs. June levels. On a Y/Y basis, used vehicle prices rose 12.5% on a +23.5% comp. By class type (Y/Y change): Compact +18.3%, Midsize +15.3%, Luxury +9.3%, Pickups +5.9%, SUV/CUV +11.3%, and Vans +22.9%.
#5 QUOTE OF THE WEEK: “As every barrel of oil, on average, is slightly more marginal than the last, being deeper in the ground etc., it requires more of its own specific energy in its own extraction. With more than 50% of the Specific Energy of a barrel of oil now already being used, without other energy sources to fuel production, this would infer that production and GDP have peaked with all its economic, social, and political implications.” - Andrew Lees, Macro Strategy Partnership
Hodges Private Client is a program offered through Hodges Capital Management, Inc. (“HCM”). HCM is an Investment Advisory Firm registered with the Securities and Exchange Commission (“SEC”), is a wholly owned subsidiary of Hodges Capital Holdings and serves as investment advisor to the Hodges Funds. HCM is affiliated with First Dallas Securities, Inc, a broker-dealer, and investment advisor registered with the SEC.
This discussion is not intended to be a forecast of future events and should not be considered a recommendation to buy or sell any security. Past performance is not indicative of future results. Investing involves risk. Principal loss is possible. Investing in smaller companies involves additional risks such as limited liquidity and greater volatility. No current or prospective client should assume that information referenced in this communication is a recommendation to buy or sell any security or is a substitute for personalized investment advice from your individual advisor. HCM does not provide tax or legal advice. Consult your tax or legal advisor for any related questions.
All information referenced herein is from sources believed to be reliable and is provided as general market commentary and does not constitute investment advice. This material was created for informational purposes only and the opinions expressed are solely those of HCM. HCM shall not in any way be liable for claims and makes no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information. The data and information are provided as of the date referenced and are subject to change without notice.