Japan’s second-largest automaker, Honda Motor stock (NYSE: HMC), has seen its stock outperform this year, rising by almost 60% year-to-date. Honda is seeing its volumes recover after a mixed couple of years. Over Q1 FY’24 Honda sold 901,000 vehicles, up from 815,000 a year earlier, driven by stronger uptake in the United States, with production also picking up as the semiconductor shortage and supply chain constraints also eased. Motorcycle sales also rose to 4.5 million, up from 4.2 million in the year-ago quarter led primarily by higher sales in Indonesia. Earnings over Q1 were also stronger, coming in at 219.06 yen per share (about $1.50), with revenue growing by 21% year-over-year to 4625 billion yen ($31.6 billion). Operating margins over the last quarter expanded to 8.5%, up from 5.8% in the year-ago quarter.
Notably, HMC stock had a Sharpe Ratio of 0.2 since early 2017, which is lower than the figure of 0.6 for the S&P 500 Index over the same period. Compare this with the Sharpe of 1.2 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.
Support authors and subscribe to content
This is premium stuff. Subscribe to read the entire article.