Saturday, June 27, 2009

Toyota Analysis

Toyota is a great company that will contiue to grow for years to come and will remain at the top on the automobile industry. This company's stock is considered by many to be a blue chip stock, which means that it is a good investment no matter what the economic conditions are.
Toyota is the leader of innovations when it comes to vehicles. Many of the company's innovations will be introduced in the coming years, like the solar panel roof that will power the air conditioner of the car.
The company has high buying power and great relationships with its suppliers and that is why the JIT system of Toyota is so effective. The company also uses the Kaizen philosophy which is focused toward continuous improvement.
Toyota is following sociocultural forces with the introduction of many new hybrid vehicles. The Toyota Prius is one of the most highly successful hybrid cars when you consider the amount of sales. The solar panels on the roof of the car are also another example of a green aspect of Toyota's vehicles.
Toyota would be considered by many as a star when looking at the BCG matrix, but in reality it is a cash cow due to the low growth of the automobile industry.
The financials of Toyota are solid today and have been for many years. The company is expected to have slightly lower profitability ratios over the next year, but when the U.S. comes out of the recession, these ratios will increase quickly.
Toyota would be a great company to work for. The company does not want to lay off employees, so a job here would be fairly stable. Also, Toyota is very loyal to its employees and the jobs at Toyota pay a decent rate.
At the current moment I would not suggest investing in Toyota stock. The company is projecting more losses through the rest of the year, but as soon as there is a sign that the U.S. is coming out of the recession I would definately invest in this company. The profitability ratios of the company are good and analysts suggest that Toyota stock is a safe stock to invest in. The company's stock is currently trading for $76.40, which is up about $10 from January, but almost $20 lower than it was trading at the same time last year. The recession really affected the automobile industry, but Toyota was able to stay afloat due to its great financials and lower inventories.

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