Search

The outlook for automobile and truck industry profits for the remainder of the year 2001 are slim, and the industry is seeing aggressive marketing as a result. The impact of Federal Reserve interest rate cuts should help industry volume by mid-2002, however. These stocks are not timely for investors in late 2001.

Consolidation and retrenchment in 2000 and 2001 have made the grocery store industry more competitive, although some costs are handicapping earnings. Several companies are taking steps to improve profits, however. These stocks have become more timely in 2001, but investors need to be selective.

The food industry is attempting to decrease inventory levels in response to the slowing US economy in the year 2001. There has been some industry consolidation, as well, and this is expected to continue. These stocks are mid-range for timeliness, but several have potential for the next three to five years.

Electronic industry stocks have not performed well in 2001 and the supply and demand environment for the near term has made cost cutting important. Prospects for growth for the future are good, however, and foreign markets are becoming more important. These stocks are not timely for investors in 2001.

The economic environment, both foreign and domestic, for the packaging and container industry in 2001. Asbestos litigation remains a concern, but interest rate easing by the Federal Reserve Board may help in the future. These stocks will perform with the market in 2001, and several have potential for the next three to five years.

Stocks of the retail building supply industry have performed less well than in the past with the slowing US economy in 2000 and 2001. There is more room for consolidation in the industry, and Home Depot and Lowe's remain the leading companies. Lowe's Companies Inc is the only timely issue in this industry for 2001.

There has been greater demand for new homes in 2001 with the Federal Reserve Board's lowering of interest rates in the US. Profits for the homebuilding industry are expected to be good, but there are reasons for caution, especially in California. These stocks are timely for 2001 with good near-term prospects.

Building materials industry stocks have performed will in the first six months of 2001 with American Woodmark being a standout. However, asbestos litigation, the slowing economy, and other issues may have an effect on the industry. Investors should focus on the more diversified companies.

Stocks in the medical supplies industry have continued to do well in 2001, and this is expected to remain the case in the future. Consolidation has increased in 2001 after a quiet year for acquisitions in 2000. These stocks are timely for 2001 and for the next three to five years, as well.

The precision instruments industry is comprised of a diverse group of companies which offer a wide range of products. Earnings results for 2001 and 2002 are expected to be good, and for the next three to five years, as well. Investors should find many good opportunities in this sector.

Potential mergers, company reorganisation and low priced shares add to the potential of the Food Processing Industry for long term investment. Includes details of related companies.

Increasing demand and improved operating efficiencies by packaging and container companies are likely to improve industry prospects in the year 2000 and the near future. Recovery in the overseas markets and consolidation in the US industry will be beneficial, also. Most of these stocks are not timely in the year 2000 and investors need to be selective in their choices.

The price-earnings multiples for the homebuilding industry have been depressed in the 1st qtr of the year 2000 due to higher mortgage rates and other factors. Demand in the housing sector is also expected to slow in the second half of the year as well. Investors will find several good stocks in this sector for the the year ahead and the next three to five years.

Warehouse-type superstores continue to dominate the retail building materials industry and smaller companies are having a more difficult time. Fragmentation remains in the professional sector of the industry, as well. Several of these stocks are expected to outperform the market during the year 2000, but investors need to be selective in their choices.

Narrowing profit margins and slower growth in enrollments combined to make 1999 a weak year for the educational services industry. However, the distance learning trend and solid industry fundamentals should improve margins over the next three to five years. This industry is expected to grow from 15% to 25% out to the years 2002 to 2004 in spite of current problems.

Stocks of the grocery store industry mainly declined in 1999 for a variety of factors, such as weak sales and the increased minimum wage. Online line services and home delivery of groceries are two of the newer trends in the industry in the year 2000. These stocks are not timely, but patient investors will find some buying opportunities for the next three to five years.

Technological advances, changed review procedures at the Food and Drug Administration, increased merger and acquisition activity, and other factors were some of the trends that accelerated stock prices in the medical supplies industry in the 1990s. However, market maturation, pricing pressures and economic weaknesses overseas have made the end of the decade more challenging for this sector. Most stocks in this industry will only match the market in the year 2000, but some have good price potential for the year ahead.

Shipments for the precision instruments industry have increased in 1999 and the near-term prospects for the industry are optimistic for the year 2000 and for the next three to five years as well. The precision instrument industry is comprised of a diverse universe of companies and there are various economic factors which will affect demand in the future, however. Advances for industry sales and earnings are expected to be modest in the year 2000 and investors must be able to tolerate some risk with these shares.

There has been higher demand for automobiles and trucks in the US in 1999 due to the good economy, and total sales are expected to reach 16.5 mil vehicles during the year. The companies that comprise the auto and truck industry are expected to spend more on research, turn to the Internet, and tighten operations in the year 2000 in addition to other new strategies and goals. These stocks are expected to outperform the market in the year 2000, and several potential for the next three to five years.

The educational services industry remains financially in late 1999 due to the strong economy luring students from schools and rapid expansion putting operating margins under pressure. However, several fundamental factors, such as demographic trends and wage differentials between degreed and non-degreed employees, remain solid. The industry can expect earnings growth of 15% to 30% through the years 2002-2004 and these stocks are expected to due well within that time frame.

The food industry is in the processing of change due to consumer demand for convenient and healthy food choices and the organic and natural food sector is growing at a 10% to 12% annual pace in 1999. Results are also being strengthened by marketing leverage across product lines and the divestiture of non-core businesses. Most of these stocks are not timely for 1999 and the year 2000, but several have price appreciation potential.

Large acquisitions in the grocery store industry, especially by Albertson's and Kroger, have caused supermarket stocks to lose favor with many investors, due to the economics of merging. Other retail sectors, such as discount stores, are entering the grocery business, and online grocery shopping may be a future industry segment, or only a fad. These stocks are not timely in 1999, but several may have potential for the next three to five years.

The near-term earnings-growth prospects for the packaging/container industry as a whole are poor, but the long-term prospects for many companies within the industry are brighter. Investors with a growth orientation and a three-to-five-year investment horizon are advised to consider Caraustar, Owens-Illinois, Crown Cork & Seal, Smurfit-Stone, and Shorewood.

Most companies in Value Line's homebuilding industry group have shown strong earnings momentum. Their stock prices have moved lower, however, due to interest-rate worries and other concerns. Therefore, it is a good time to buy homebuilding stocks. Investors should focus on companies whose presence in growing markets is strong.

Cost control with the aim of income and earnings growth has become the major management trend in the food industry in the late 1990s after several years of overseas expansion, mergers, and acquisitions. The small- and medium-sized consolidators have been the best performers in the industry as expansion is no longer the best method for growth among the larger companies. These stocks are not timely in 1999 and investors have few selections for stock price growth.

US sales of automobiles and light trucks are expected to decline in 1999 to 15.5 mil units from the 15.6 units sold in 1998, due mainly to lower US economic activity and softer North American demand. Automobile industry labor problems with the United Automobile Workers have improved in recent years, but there is a possible strike on behalf of car haulers by the Teamsters Union. These stocks are expected to perform well, with Ford Motor Co one of the better selections for investors.

US sales projections for autos and light trucks are being increased due to strong sales during the first quarter of 1999. However, it is believed that future environmental emissions legislation could affect industry profits. Auto stocks are expected to do well in the near term, due in part to low interest rates and strong consumer confidence, which should translate into continued strong sales.

Shipments for the precision instruments industry fell about 8.3% for the 3rd qtr of 1998 compared to the same period for 1997, but industry observers are forecasting mild growth through the years 2001-2003. The industry is comprised by many diverse companies that serves many customers in the world of business and industry, as well as individual cusumers. Modest growth prospects for the industry indicate that investors should seek opportinities in other areas.

Low interest and unemployment rates, combined with a good stock market and consumer confidence, made 1998 a good sales year for the automobile and truck industry. However, sales are expected to be lower in 1999 due to price competition and deflation as well as slower US economic growth. The industry is also becoming more global with the merger of Daimler-Benz and Chrysler Corp. Investors need to be selective with these stocks in view of the cyclical nature of the industry and current valuations.

Growth prospects in the food industry are limited due to market saturation and the maturity of the industry, but some new trends in US food consumption patterns may help some companies enlarge their markets. One of the new areas of growth is in the low cholesterol, low-fat/non-fat food segment and health foods are now being sold in supermarkets. Several stocks in this industry will outperform the market in 1999, but most are conservative investments.

Merger activity has increased in the grocery store industry in 1998 and the larger chains have begun to crowd out the smaller, independent stores, and this trend is expected to continue through the efforts of Wal-Mart Stores Inc. Industry earnings and profits have been good in 1998, and streamlining, buying power, and increased efficiency should enhance this. Many of these stocks are expected to outperform the market in 1999.

The US food wholesalers industry has become increasingly competitive in the late 1990s as potential customers have been mergers with each other in the consolidating retail food industry. Consolidation has increased among food wholesalers, also, but the remaining operations will be more efficient and better managed. Several of these stocks will be of interest to short-term investors, but long-term earnings prospects are more meager.

Strong earnings are expected to be posted for the packaging and container industry in 1998, and many of these companies are taking steps to generate greater efficiencies and profits. Emerging markets for these products are expanding, consolidation is enhancing growth, and there is demand for metal cans. Many stocks in this industry have strong growth potential for the next three to five years although few are timely in 1998.

Excess global capacity and sluggish demand have created earnings pressure for the paper and forest products industry in mid-1998, and the stronger dollar has allowed cheaper paper to be imported into the US. Lower paper and lumber prices are among the reasons the industry needs to consolidate, but newsprint prices are firm as of Sep 1998. These stocks are expected to lag the market in 1998 and 1999.

Stocks in the homebuilding industry have fell during the 3rd qtr of 1998 with the rest of the market, but widespread affluence and population growth still give strength to the industry. Homebuilders have also been applying principles and techniques of manufacturing to their industry to help trim costs. Stocks in this industry are timely in 1998, and several have good potential through the years 2001-2003.

The factors affecting the medical supplies industry's future performance include the development of new technologies and pressure to control healthcare costs. Given those factors, some companies will suffer, but those with cost-effective products will thrive. Healthcare stocks are generally perceived as defensive, but they have proved vulnerable to the market's increased volatility.

The US government is planning to make some major changes for managed care and Medicare recipients beginning in Nov 1998 and this will have an effect on provider cost controls. Medical supply manufacturers, especially the orthopedic sector, will be affected by this, but new products will aid sales and margins in 1998 and through the years 2001-2003. Investors, however, should select the most timely stocks for commitment.

Issues are presented concerning the performance of stocks in the auto and truck industry sector. The performance statistics of a number of companies in this sector are included.

Features Dreyer's Grand, manufacturer and distributor of packaged ice cream in the United States. Stocks of the company; Profitability of the company in the first quarter of 2000; Plans of the company.